Page 339 - XXV Asamblea General Miami 2012

Pricing Systems - Spain

Manuel Fernández

First, I want to thank José de Vedia, president of the Surety Committee, for having invited
me and for giving Houston Casualty Company (HCC) the opportunity of participating in
the panel with two presentations. One of them is about the UK market and the other, on the
pricing system in the Spanish market.
I will address the following topics: factors that influence rate making, the Spanish regulatory
framework in force applicable to this subject and the evolution of rates in Spain, especially
in the current crisis that has a significant bearing on the rate issue. Finally, we will consider a
proposal to try to avoid the reduction in rates that some opportunistic companies are trying to
apply to gain market share.

Pricing

If we start with the factors that influence rate making, the “rule of thumb” method that has
already been mentioned is not used in Spain. Instead, we actually apply the “How does this
look like?” approach. When talking with a partner yesterday, we said that it is really difficult to
fix rates, but it is also true that we make a decision based on what we have in front of us at the
moment.

337XXV Asamblea General / XXV General Assembly