SUP 16 Annex 49B Notes on completing the pricing information report form (REP 021)
1This annex contains guidance on completing the pricing information report form (REP 021)
General notes
(1) All firms should complete Sections 1 and 6. In addition, insurers and managing agents should complete Sections 2 and 3, and price setting intermediaries should complete Sections 4 and 5.
(2) All monetary figures should be rounded to the nearest pound.
(3) Unless otherwise stated, monetary figures should be calculated and reported excluding insurance premium tax.
(4) Multi-product policies which include both home insurance and motor insurance in a single policy should be split between home insurance and motor insurance and reported as two separate policies.
(5) Firms should provide their core pricing information on the core product on an aggregated basis for each of home insurance and motor insurance products, including closed books, and then split by:
(a) product type2 e.g. motor insurance: car, motorcycles, including tricycles, other, home insurance: buildings only, contents only, buildings and contents;
(b) type of channel e.g. all products sold direct, via price comparison websites, via intermediaries or via affinity/partnership schemes; and
(c) tenure. For example, for each of customers with less than 1-year relationship with the firm, customers with a 1-year relationship with the firm, customers with a 2-year relationship etc.
(6) Firms should provide their additional claims-related information on the core product on an aggregated basis for each of home insurance and motor insurance products, including closed books, split by product type2 only.
(7) Firms should also report core pricing information separately for closed books. Firms should name each closed book with 10,000 policies or more. Firms should provide information separately for each closed book with 10,000 policies or more and other closed books on an aggregated basis, split by:
(a) product type2; and
(b) tenure.
(8) Firms should provide their information on related additional products and fees on an aggregated basis for each of their home insurance and motor insurance business, including closed books, split by tenure. This information does not need to be categorised by product type2.
Data |
Notes |
The number of years a customer has held the policy, including any renewal. For example: T0 = customer who has held their policy for less than 1 year; T1 = customers who held their policy for 1 year; T10+ = customers who have held their policy for 10 years or more. Firms should round down to the last full year the customer has held a policy with them in cases where customers have contracts that renew on shorter than annual basis. For example, a firm should classify a customer on a six-monthly contract who has renewed the policy once as T0 (customer who has held their policy for less than 1 year) and a customer who has renewed this policy three times as T1 (customers who have held their policy for 1 year). Firms should report data for each tenure individually from T0 to T9 inclusive. Data for any tenure that is T10 or greater should be aggregated and reported as T10+. For retail premium finance, the tenure of the core product should first be considered and then the tenure of the retail premium finance. For example, if a customer cancels an existing policy with retail premium finance and takes out a new policy with retail premium finance, then the tenure for both the new policy and the retail premium finance would be T0. If a customer has the same policy for four years and pays by retail premium finance for the first two years, and for the third year does not use retail premium finance but for the fourth year uses retail premium finance again, the tenure in the fourth year would be T4 for the core product and T0 for the retail premium finance. |
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Firms should name each closed book containing 10,000 or more policies. Firms should report information separately for each closed book containing 10,000 or more policies and for all other closed books on an aggregated basis. Separate reporting for closed books should cover the period from the date on which the firm categorised the relevant books as being closed books until the end of the reporting period. |
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Total gross written premium |
The total amount of gross written premium, (excluding insurance premium tax) in relation to policies incepted or renewed during the reporting period. |
Average gross premium |
The total amount of gross written premium, (excluding insurance premium tax) in relation to policies incepted or renewed during the reporting period divided by the number of policies incepted or renewed in that reporting period. |
Total net-rated written premium |
For net-rated business, insurers, managing agents and price-setting intermediaries should report the total net-rated premium set by the insurer or managing agent in relation to policies incepted or renewed during the reporting period. |
Average net-rated premium |
For net-rated business, insurers, managing agents and price-setting intermediaries should report the total net-rated premium set by the insurer or managing agent in relation to policies incepted or renewed during the reporting period divided by the number of policies incepted or renewed on a net-rated business basis in the reporting period. |
Total number of policies incepted/renewed |
The total number of policies incepted for tenure T0 and the total number of policies renewed (all other tenures). |
Total number of policies in force |
The total number of policies in force at the end of the reporting period. |
Average prior year gross premium |
Firms should report the average gross premium for customers2 in the preceding year for the core product by product type2, type of channel and by tenure. For example, if a firm is reporting data for motor insurance: car, for direct sales to customers with tenure T4, then the firm should report the average gross premium for2 these customers at tenure T3. Firms do not need to report average prior year gross premium in respect of customers of tenure T0. |
Proportion of customers where the expected claims ratio falls within given bandings |
Expressed as a percentage, the proportion of customers where the expected claims ratio is between X% and Y%. For example, for the proportion of customers with expected claims ratio greater than 30% but less than or equal to 40% for the direct sales type of channel, with a tenure of one year (T1), expressed as a percentage: A. calculate the number of policies incepted or renewed with expected claims ratio greater than 30% but less than or equal to 40%; and B. divide (A) by the total number of policies incepted or renewed for the direct sales type of channel and customers of tenure T1. |
Total earned premium |
The total premium earned in the claims-related reporting period. This should be calculated on the same basis as that reported in a firm’s financial statements. This information is only to be reported for the total aggregated figures by product type2 (not by tenure). |
Average earned premium |
The total premium earned in the claims-related reporting period divided by the number of policies from which the total premium was earned. This should be calculated on the same basis as a firm calculates this metric for internal purposes. This information is only to be reported for the total aggregated figures by product type2 (not by tenure). |
Gross incurred claims ratio (with IBNR/IBNER) |
Expressed as a percentage, actual claims incurred ratio for the claim-related reporting period. This data is only to be reported for total aggregated figures by product type2 (not by tenure). The gross incurred claims ratio represents the incurred claims cost (gross of reinsurance) as a proportion of earned premium (gross of reinsurance), expressed as a percentage. Incurred claims cost is the cost of all claims reported for the claims-related reporting period, plus any other changes in the claims’ reserves including for IBNR, IBNER and prior years’ reserve adjustments in that period. This should be calculated on the same basis as that reported in a firm’s financial statements. IBNR is claims incurred but not reported. IBNER is claims incurred but not enough reported. This information is only to be reported for total aggregated figures by product type2 (not by tenure). |
Developed incurred claims ratio (with IBNR/IBNER) |
Expressed as a percentage, actual adjusted (ultimate) claims ratio for: • the previous claim-related reporting period • the claim-related reporting period 2 years ago • the claim-related reporting period 3 years ago The developed incurred claims ratio is the gross incurred claims ratio for prior years adjusted for claims that were not fully developed. This should be calculated on the same basis as that used by the firm to calculate the developed incurred claims ratio for internal purposes. This information is only to be reported for total aggregated figures by product type2 (not by tenure). |
Total prior years’ reserve release |
Firms should report any reserve releases in the current claim-related reporting period that relate to surplus reserves for prior years. This information is only to be reported for total aggregated figures by product type2 (not by tenure). |
Total prior years’ reserve strengthening |
Firms should report any reserve strengthening in the current claim-related reporting period that relate to shortfalls in reserves for prior years. This information is only to be reported for total aggregated figures by product type2 (not by tenure). |
Total charged (£) for retail premium finance in the reporting period |
Total charged for retail premium finance on policies incepted or renewed in the reporting period. The total charged (£) should include only the charge for retail premium finance (and not the total gross written premium of the related core or add-on policies). |
Retail premium finance – number of policies (core products and add-on policies) incepted or renewed with retail premium finance |
Total number of policies incepted or renewed in the reporting period with retail premium finance. |
APR range |
The number of policies where the related retail premium finance sold falls within each the following specific APR ranges: • 0% • 0.1% - 9.9% • 10% - 19.9% • 20% - 29.9% • 30% - 39.9% • 40% - 49.9% • 50% or more Where APR falls within a range boundary, e.g. 9.95%, firms should round down. For example, an APR of 9.95% should be reported in the 0.1% - 9.9% APR range. However, an APR of less than 0.1% but greater than 0% should be reported in the 0.1% to 9.9% APR range. Where a customer’s credit risk rating is used in calculating their insurance risk, any related loading should not be reported under retail premium finance. |
Premiums from add-on policies incepted or renewed - gross written premium |
Total gross written premium from add-on policies incepted or renewed in the reporting period. Cover extensions and optional extras should be reported as part of reporting for the core product and not as an add-on policy. Gross written premium should include only the gross written premium for add-on policies (and not that for related core policies). |
Number of add-on policies incepted or renewed |
Total number of add-on policies incepted or renewed in the reporting period. |
Pre-contractual fees |
Total and average (mean) pre-contractual fees charged on the core product (net of value added tax). The average is the average for each reporting category, based on the number of customers who incurred fees. |
Post-contractual fees |
Total and average (mean) of any post-contractual fees on the core product (net of value added tax). The average is the average for each reporting category, based on the number of customers who incurred fees. |