Pricing policies too low and selling too many is a risky strategy for insurance carriers. Simply stoking volume growth in policies while ignoring the bottom line has often led to a forced market exit of property-casualty insurers as well as other risk-management enterprises.

Alternatively, securing the right premium for the right risk is the name of the game–as is the continual segmentation and management of portfolios, which consider competitor reactions and customer choices, as well as the productivity of agents, clients and markets. Collectively, such informed business analysis can present new possibilities for the modern insurance enterprise in today's restrictive economy.

There are many challenges as well. Premium leakage, insurance-to-value, rate adequacy, underwriting expenses, commissions by channel, loss control and the basis of claims costs all point to the common predicament of effectively analyzing risk. The problem can be even more complex as risk profiles change over time, sometimes quickly and within finite policy periods.