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📊 '''Policy aggregation''' is the practice of consolidating multiple [[Definition:Insurance policy | insurance policies]] — whether held by a single [[Definition:Policyholder | policyholder]] or spread across a book of business — into a unified view for the purposes of [[Definition:Underwriting | underwriting]] analysis, [[Definition:Exposure management | exposure management]], or [[Definition:Regulatory reporting | regulatory reporting]]. Insurers, [[Definition:Managing general agent (MGA) | MGAs]], and [[Definition:Reinsurance | reinsurers]] all rely on aggregation to understand their cumulative [[Definition:Risk | risk]] position, especially when policies overlap in geography, peril type, or coverage period.

🔧 In practice, aggregation involves pulling data from multiple [[Definition:Policy administration system | policy administration systems]], normalizing policy terms and coverage limits, and mapping the resulting exposure to common frameworks such as [[Definition:Catastrophe model | catastrophe models]] or [[Definition:Accumulation zone | accumulation zones]]. A property [[Definition:Insurance carrier | carrier]] writing business across several states, for instance, will aggregate policies by ZIP code and [[Definition:Total insured value (TIV) | total insured value]] to gauge its hurricane or earthquake [[Definition:Probable maximum loss (PML) | probable maximum loss]]. [[Definition:Delegated authority | Delegated authority]] programs add complexity because the MGA may issue policies on behalf of several carriers, requiring each party to aggregate the same underlying risks differently within their own books.

💡 Getting aggregation right has direct financial consequences. Poor aggregation can leave an insurer unknowingly over-concentrated in a single region or class of business, turning a manageable [[Definition:Loss event | loss event]] into a solvency-threatening one. Regulators and [[Definition:Rating agency | rating agencies]] scrutinize aggregate exposures when evaluating an insurer's [[Definition:Capital adequacy | capital adequacy]], and [[Definition:Reinsurance treaty | reinsurance treaties]] often contain [[Definition:Aggregation clause | aggregation clauses]] that define how multiple losses combine into a single recoverable event. As data infrastructure in the industry matures, real-time policy aggregation is becoming a competitive differentiator for carriers seeking tighter control over their [[Definition:Risk appetite | risk appetite]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Exposure management]]
* [[Definition:Accumulation zone]]
* [[Definition:Catastrophe model]]
* [[Definition:Total insured value (TIV)]]
* [[Definition:Probable maximum loss (PML)]]
* [[Definition:Risk appetite]]
{{Div col end}}

Definition:Policy aggregation - Revision history

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