Marginal Impact Analysis

 

A Marginal Impact Analysis enables you to view the effect that a specific loss results set (the target or new portfolio/contract) has on another loss results set (the reference portfolio). For example, an underwriter may want to assess the potential consequences of adding a new contract or portfolio to an existing portfolio.

  You cannot run Marginal Impact, Loss Group, and CAT XOL analyses on the results of Non Catastrophe Peril Analyses.

Marginal Impact combines two loss results sets, providing users with two outputs, one for Portfolio Impact and another for Marginal Impact. Touchstone stores summary EP data (aggregate and occurrence), event totals, and distribution based on the geographic resolution used to save the loss results, for both sets of impact results. You can use the Portfolio Impact results to determine capacity, and the Marginal Impact results to determine pricing. The calculation for the Portfolio Impact is equal to (Reference + New), while the calculation for the Marginal Impact is equal to (Reference + New) - Reference. (The calculation for Marginal Impact is not a mathematical formula and is, therefore, not equal to "New.")

  You cannot run Marginal Impact analyses on old event sets. Click here for information about working with modeled losses from previous product versions.

You can view the regional marginal impact provided that you have saved the loss results by an appropriate geographical resolution. For example, to view results for Florida Wind, you must have saved the results by state.

  Since Marginal Impact Analyses can consume a lot of disk space, you may want to delete them on a regular basis.

In Portfolio Mode, inputs to the analysis can be Detailed Loss Analysis or Loss Group Analysis results. You determine which of these inputs is the target (or new) portfolio and which is the reference portfolio. The results sets may be on different databases and may be in different projects, but must be on the same server. In addition, all the loss results must be for the same number of simulated years. Further, when you combine two or more loss results for the same model, the model versions must be compatible. The system makes sure that the losses can be consolidated.

In Underwriting Contract Mode, you choose a target contract and a reference portfolio, and Touchstone compares the most recent Detailed Loss Analysis results for this target (or new) contract with the reference portfolio.

 
For underwriters to run Marginal Impact Analyses in Underwriting Contract Mode, a user with appropriate permissions must first run a Detailed Loss Analysis in Portfolio Mode on the master portfolio exposure view. The results of this analysis serve as the reference portfolio for the Marginal Impact Analyses that underwriters run in Underwriting Contract Mode. Users with appropriate permissions can run multiple Detailed Loss Analyses and/or Loss Group Analyses in Portfolio Mode on the master portfolio exposure view, thereby providing multiple reference portfolio choices for underwriters running Marginal Impact Analyses in Underwriting Contract Mode.

For more information, see Configuring and Running a Marginal Impact Analysis.

 

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Touchstone V3.0 Updated December 01, 2016