What’s the difference in terminology between “Umbrella” and “Excess” ? Are these essentially synonymous? For example i’m searching for how competitors operate their programs and what comes up in the search results are often “Commercial Umbrella and Excess” and i wonder if that phrasing is redundant. Is it? Why is necessary to use the phrasing “Umbrella AND Excess?”
Further, is there actuarial literature on umbrella pricing? I’ve seen inconsistent approaches between commercial and personal lines in the industry. I’ve seen personal lines arrive at basic charges (and minimum premiums) depending on what the umbrella is sitting on top of, but for commercial, the first layer of premium(1m) is often a straight multiple of the premium for the underlying policy.
Why might this inconsistency make sense?
Also, when it comes to umbrella pricing, is the below paper from the exam 8 syllabus the only literature on excess pricing? Does include circumstances for pricing where there’s minimal or no claims in the excess layers? Like if you have very few claims in the 1m-11m range, what’s the pricing approach? I believe there could be curve fitting, or an approach from a paper i forgot where you can extract relative costs in a layer based on pricing for layers where you do have claims.
Till All are one,