Rate a Product

Learning Objectives

After completing this unit, you’ll be able to:

Describe versioning for rating procedures.
Identify the steps to configure a root product for rating.
Explain how to simulate rating on a root product.

Before You Start

Before you start this module, make sure you complete the following content. The work you do here builds on the concepts and work you do in that content.

Product Modeling for Insurance Quoting

Also, consider completing the following recommended content.

Implement Rating Procedures

In Product Modeling for Insurance Quoting, you learned about Cumulus Insurance, a large, well-diversified provider of insurance services nationwide. Cumulus currently uses the Digital Insurance Platform to transform its legacy quoting system. In the module, you followed Justus Pardo, the company’s ace solution architect as he modeled, created, and configured insurance products. Now that he has set up the products, it’s time to calculate their premium based on a set of input characteristics.

The Digital Insurance Platform performs these calculations using rating procedures—the backbone of insurance pricing. Ultimately, they determine the cost a customer must pay for the carrier to take on the risk of insuring the customer.

Rating procedures typically involve a combination of an expression set and a decision matrix linked to a root product.

A decision matrix is a table of information, such as base rates and coverage factors.
An expression set is a calculation engine that does all the calculations using an algorithm you define. The expression set uses the data in the decision matrix to calculate and return a final price as output.

Sometimes, though, more than one expression set is required to support the rating. For example, complex products that involve aggregation steps use two expression sets. In such cases, use an OmniStudio Integration Procedure to complete the rating procedure. Integration Procedures are declarative, server-side processes that execute multiple actions in a single server call. They are optimal for accessing and transforming data without requiring any user interaction. Here, the Integration Procedure uses actions to call more than one expression set, combining them together for rating. One or more inputs go in, and one or more outputs, plus the pricing, come out.

Whether an Integration Procedure is involved or not, the basic steps for configuring the rating information remain the same. Here are the key stages.

Get rating information.
Create decision matrices.
Prepare the rating procedure.
Link the root product to the rating procedure.

In future units, you learn key considerations and configuration steps for each stage. In this unit, take a broader look at how rating procedures connect with insurance products.

Use Versioning for Rating Procedures

Insurance rating models regularly evolve to reflect market changes, customer behavior, and regulatory requirements. To manage these changes effectively, Digital Insurance Platform offers insurers such as Cumulus robust versioning options that ensure flexibility in pricing decisions. The platform makes it easier for insurers to plan for and adapt to future needs.

Decision matrices, expression sets, and Integration Procedures can each have multiple versions. When you call a rating, it uses only one version. But, which one?

To specify a version for rating, you must first activate the version. Here's how.

Decision matrix version: Edit the version, and select Enabled.
Expression set version: In the Expression Set Builder, choose Activate.
Integration procedure version: In the Procedure Configuration element, choose Activate Version.

For Integration Procedures, only one version can be active at a time. However, for decision matrices and expression sets, the following properties determine which version is used.

Start Date Time: The date and time when the version becomes active.
End Date Time: The date and time when the version becomes inactive. This property is optional.
Rank: The value that determines which version is selected. The higher-ranked version takes precedence.

During rating simulation and at run time, you specify an effective date. If unspecified, the effective date defaults to today.

Here’s an example with a decision matrix and an expression set.

Time is from left to right. Notice the two active decision matrixes. The first version has a rank of 3 and is active from January to March. The second version is active from February to July with a rank of 2. There are two expression sets. The first version has a rank of 1 and is active from January to July. The second version has a rank of 5 and is active from April to July.

For the effective date in the last row, which version of the matrix is used? Which version of the expression set is used?

Decision Matrix: Version 1 is used. Both versions are enabled for March, but version 1 has a higher rank.
Expression Set: Version 1 is used. Version 2 has a higher rank, but it's not enabled in March.

The version number itself doesn’t affect version selection.

Configure a Root Product for Rating

When a rating procedure is ready, configure one or more root products to reference it. Here’s the basic process.

Specify the rating procedure.
Map rating inputs and outputs.
Test setup with the product simulator.

Specify the Rating Procedure

To specify the rating procedure for a root product, edit product details and fill in a couple of fields.

Rating Procedure Type: Select Expression Set or Integration Procedure.
Rating Procedure Name: Carefully type it in as you must type the value exactly.
- For the expression set, enter its name.
- For the Integration Procedure, enter the combination of its Type_SubType.

In addition to specifying the rating procedure, you must map the inputs and outputs. If the rating procedure is an Integration Procedure, consider the inputs needed by all the expression sets it calls.

Map Rating Inputs

Map each attribute to the corresponding variable name by typing the variable name in the Rating Input Mapping field.

For example, Justus configures a rating procedure that requires the variable, ded, as an input. Its value comes from an attribute named Deductible.

To properly map this input, set Rating Attributes Use to Input. For Rating Input Mapping, enter ded.

Mapped variable names and default values list on the Simulate tab. Verify them there.

Map Rating Outputs

To map rating outputs, set Rating Attributes Use to Output and enter the variable name as Rating Output Mapping. However, mapping output goes beyond attributes. It includes mapping the rating results to products.

Rating procedures sometimes return one result, such as the total premium amount, sometimes multiple results, such as premium for each coverage, or a combination of both. You can compute totals in the rating procedure or by setting formulas in product details. Edit product details to map these outputs to the price of a product. You can enter a single variable or a formula.

Total Pricing Formula: This is the formula for the total premium for the product.
Total Insured Formula: This is the formula for an insured item instance.
Pricing Source Mapping: This is the mapping of an output to a coverage.

For more information about setting formulas and mapping outputs, check out Map Ratings to Product Specs.

After you link a root product to its rating procedure, make sure it’s working as expected by simulating it.

Simulate the Rating Procedure

Test the rating procedure using the Simulate tab of the root product. Before running the simulation, set the simulated values for input to the desired test values. Next, in the Options JSON, set options as needed.

After the simulation values and options are ready, click Simulate and verify the results.

Check the Simulated Values under Rating outputs and confirm that the output values are correct. For example, check the value of the Total Pricing Formula.

After simulating, the generated Input JSON and the returned Output JSON appear.

Confirm the data is returned as expected. Use to copy it to a JSON editor for easier viewing.

In this unit, you learned how insurance products connect with their pricing logic through rating procedures. You now know the components of a rating procedure and how versioning allows for flexibility as pricing models evolve. You also learned about mapping inputs and outputs to ensure your root products calculate premiums accurately.

In the next unit, learn how to transform existing rating information into the structured format required for decision matrices and formulas.

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