Ratemaking is an important role for the actuaries at Axxima, and we use our expertise to predict and calculate fair, accurate rates. To understand why ratemaking is such a big undertaking, it is important to understand why insurances, in general, are quintessentially different from any other product.
Think about a specific product, be it a perfume, a pair of shoes, or a car — these are all products you can price with high accuracy. On the other hand, insurances are products that promise to perform a specific task in the future based on unknown events.
By computing large quantities of data and using statistical methods, actuaries are able to project outcomes that follow a specific average, helping insurers price their products.