Reprice the line with rising loss ratio
When it may fit: A product grows but loses margin.
Evidence needed: Rate need and competitor pricing.
Trade-off: May lose volume.
Insurance Intelligence Brief
How to Compare Performance Across Products and Distribution Channels
Different products and different channels produce different loss experience and different costs. A comparison on a common basis shows where growth is profitable and where it is not.
1. The business problem
Which products and channels are making money, and which are growing at our expense?
Premium growth is rewarded in most organizations, but it comes from different places with different economics. A product or channel that is growing fast may be doing so by accepting poorer risks or paying higher commissions.
Comparing the loss ratio, expense and contribution of each product and channel, with the growth that goes with it, shows which growth is worth having.
2. What the evidence can reveal
A comparison table for each product or channel shows:
- Calculated Earned premium and growth.
- Calculated Loss ratio and its change.
- Calculated Contribution: premium less claims, and after acquisition and other costs where available.
- Information gap Channel detail: commission, retention, quality of business and service cost.
The most important pattern to look for is growth paired with a rising loss ratio.
3. Investigate the problem
The synthetic insurer is analyzed by product, and its pattern is the one to look for. Calculated Specialty & Umbrella grew premium 30.0%, the fastest, with a loss ratio of 61.5%, up 3.5 pts. Small Commercial grew 13.3% at 63.4%. Personal Auto grew 9.0%, but its loss ratio rose 8.8 pts to 74.3%, and its contribution fell from $10.7M to $8.70M.
Calculated Premium growth in Personal Auto contributed less profit, not more. The line grew by 9.0%, yet its contribution fell 18.7%. By contrast, Homeowners, Small Commercial and Specialty & Umbrella grew contribution by 2.2%, 5.7% and 19.0%, while all four lines lost some margin.
Hypothesis A channel analysis would likely show the same thing: some channels grow fast on thin or negative margins. Information gap The demo has no distribution-channel data. Adding channel to the table, with commission, loss ratio and retention for each, would show which channels to grow and which to fix.
4. Explore the interactive experience
Investigate it yourself.
Insurance Portfolio Explorer: a portfolio dashboard with loss, expense and combined ratios, a scenario simulator for rate, volume, frequency and severity, evidence-linked answers from APIS, and a sample brief, all on synthetic data.
The experience below is built on a synthetic insurer, “Demo Mutual Insurance,” analyzed by product line. It uses no policyholder or claims data of any kind, and it has no distribution-channel data, so product lines are used to show the method. Every figure is illustrative.
- In the product table, compare Premium less claims across lines, then select each line to see how it moved. Which gained and which lost?
- Select Personal Auto and compare premium growth with its loss ratio.
- Ask APIS which products warrant a closer review.
5. Evaluate possible solutions
What to do depends on which product or channel is the problem.
6. What leadership should do next
Questions to answer
- Which products and channels are profitable?
- Where does growth coincide with higher loss ratios?
- What does each channel cost?
- What are the incentives?
Data to gather
- Premium, loss and expense by product and channel
- Commission schedules
- Retention
- Underwriting guidelines
Steps to take
- Build the product and channel table.
- Flag growth with deteriorating loss ratios.
- Act on the largest.
- Review quarterly.
7. Engage Two Pillars
Investigate Performance Across Your Insurance Business
Two Pillars can help carriers, agencies and brokerages investigate portfolio, claims operations, agency economics and process improvement using your own data. This demo uses no policyholder data. A good first step is a product and channel profitability table that pairs growth with loss experience.
Sources and data notes
- The organization, its figures, and every number in this article and its interactive experience are synthetic and illustrative. They are not real data, a benchmark, or a forecast.
- Reviewed October 2026. This article describes an approach to investigation. It does not replace review by qualified professionals.