Endorsements - SME Package¶

Overview¶

Based on 148 policies (81 main + 67 medical) from Premia UAT database.

Common Endorsement Types in UAE¶

Based on UAE insurance market practices for SME Package policies, the most common mid-term changes include:

1. Increase Section Sum Insured¶

Most common for growing businesses: - Increase contents/stock value (new inventory) - Increase money limits (higher cash transactions) - Increase liability limit (meet contract requirements)

Premium Impact: Additional premium per section, pro-rated for remaining period

2. Add Coverage Sections¶

Expanding protection mid-term: - Add Electronic Equipment section (new computers/servers) - Add Machinery Breakdown section (new equipment purchased) - Add Business Interruption section - Add Fidelity Guarantee (employees handling money)

Premium Impact: Full section premium × (Days remaining ÷ 365)

3. Add/Remove Employees (PA & Medical)¶

Workforce changes affecting coverage: - Add new employees to Personal Accident coverage - Add employees to Group Medical (products 7038/7040) - Remove terminated employees

Premium Impact: Per-employee premium adjustment, pro-rated

4. Portable Equipment Addition¶

Coverage for mobile business assets: - Add laptops and tablets - Add mobile phones for field staff - Add portable medical equipment

Premium Impact: Additional premium based on equipment value

5. Premises/Location Changes¶

When business relocates or expands: - Change business address - Add new branch location - Modify premises details

Premium Impact: Premium adjustment based on new location risk assessment

Cancellation Rules¶

For SME Package policies:

Full Cancellation¶

Allowed when: - Business permanently closed - All assets sold - Moving to another insurer

Refund Calculation: - Short period rates typically apply - OR pro-rata if configured - Minimum earned premium (typically 25-30%)

Partial Cancellation (Section Removal)¶

Allowed when: - Specific section no longer needed - Asset disposed of - Activity ceased

Refund Calculation: - Pro-rata for removed section - Based on days remaining - Other sections continue

Premium Adjustment Logic¶

Increase in Section Sum Insured¶

Additional Premium = (New SI - Old SI) × Section Rate × (Days Remaining / 365)

Decrease in Section Sum Insured¶

Refund Premium = (Old SI - New SI) × Section Rate × (Days Remaining / 365)

Add New Section¶

Additional Premium = Full Section Premium × (Days Remaining / 365)

Remove Section¶

Refund Premium = Section Premium × (Days Remaining / 365) × Refund %

Database Structure¶

Endorsement Tables¶

PGIT_ENDT_REASON - Endorsement master
PGIT_POL_ENDORSEMENT - Endorsement details
PGIT_POL_SECTION - Updated section data
PGIT_POL_RISK_COVER - Updated coverage data

Common Endorsement Fields¶

ER_TYPE - Endorsement type code
ER_REASON - Reason description
ER_FM_DT - Effective date
ER_PREM_ADJ - Premium adjustment
ER_SI_ADJ - Sum insured adjustment

Validation Rules¶

When processing SME endorsements:

Section Changes
Verify section exists in product
Validate SI reasonableness
Check against business profile
Multi-Section Impact
Some sections depend on others
Liability section almost mandatory
Money section very common
Premium Recalculation
Recalculate only affected sections
Apply pro-rata accurately
Minimum premium rules
Underwriting Review
Material changes need approval
Significant SI increases
Business activity changes

PL/SQL Packages¶

Endorsement processing typically uses: - PGIPK_ENDORSEMENT - Main endorsement package - PGIPK_ENDT_CANCEL - Cancellation logic - PGIPK_CALC_PREMIUM_* - Section premium recalculation - AIGPK_VAL_* - Validation packages

Integration Considerations¶

When implementing SME endorsements:

Section-Level Changes
Track changes per section
Recalculate section premium
Update section sum insured
Premium Calculation
Section-by-section approach
Pro-rata for partial period
Aggregate new total premium
Documentation
Generate endorsement certificate
Update policy schedule (all sections)
Section-wise premium breakdown
Medical Endorsements (Separate)
Handle 7038/7040 separately
Per-employee adjustments
May have different rules

Common Endorsement Scenarios¶

Scenario 1: Increase Contents Value¶

Change: Contents SI from AED 200K to AED 300K
Section: 01 - Property
Calculation: (AED 100K × 0.30%) × (180/365) = AED 148
Result: Additional premium AED 148

Scenario 2: Add Machinery Breakdown Section¶

Change: Add Section 05
New SI: AED 50,000
Rate: 0.25%
Calculation: (AED 50K × 0.25%) × (180/365) = AED 62
Result: Additional premium AED 62

Scenario 3: Increase Liability Limit¶

Change: Liability SI from AED 1M to AED 5M
Section: 07 - Public Liability
Calculation: (AED 4M × 0.05%) × (180/365) = AED 986
Result: Additional premium AED 986

Scenario 4: Policy Cancellation¶

Change: Full cancellation after 4 months
Original Premium: AED 3,004
Earned Period: 33% (4/12 months)
Short Rate: 40% (typical)
Earned Premium: AED 3,004 × 40% = AED 1,202
Refund: AED 3,004 - AED 1,202 = AED 1,802

Data Limitations¶

Note: The current dataset shows 0 endorsements for SME products. This analysis is based on: - Standard insurance practices - Premia system structure - Multi-section policy patterns - Database schema analysis

For actual endorsement frequencies and types, additional extraction from PGIT_ENDT_REASON table would be needed.

Data Source: Analysis of 148 SME policies from Premia UAT. Endorsement section based on system structure and standard practices due to lack of endorsement records in current dataset.