Coverage Breadth vs Loss Exposure
Price and reserve modular coverage extensions separately so each increment is reflected in technical provisions and SCR calculations under Solvency II.
CyberTRIZ analysis · Insurance contradiction UW004 · one of 8,235 worked contradictions published by CyberTRIZ.AI
Regulations
Business Context
Broader coverage can improve customer value and make insurance products more competitive, but every additional insured event, extension, limit, or reduced exclusion can increase potential claims exposure. Narrowing coverage protects loss performance but can leave customers inadequately served or make the product unattractive relative to competing alternatives.
Insurance TRIZ Resolution
Coverage does not need to be uniformly broad or narrow. Insurers can create modular protection in which core coverage remains stable while additional exposures are activated according to customer need, risk characteristics, limits, deductibles, prevention measures, or other defined conditions. Coverage breadth can therefore increase selectively without extending identical exposure across the entire portfolio.
Applicable TRIZ Principles
Principle 1 – Segmentation divides coverage into independently configurable components.
Principle 3 – Local Quality adapts protection to the characteristics of specific risks.
Principle 15 – Dynamics allows coverage structures and limits to adjust according to changing exposure.
Expected Outcome
Broader relevant customer protection
Better control of incremental exposure
Greater product flexibility
Improved alignment between coverage and price
Decision Indicators
Early indicators that this contradiction is limiting product performance include:
Product teams repeatedly remove valuable coverage to control losses.
Broad endorsements generate disproportionate claim severity.
Customers pay for coverage components they do not need.
Underwriters compensate for product breadth through extensive restrictions.
Coverage changes produce unexpected portfolio-wide exposure.
Monitoring these indicators helps insurers expand protection selectively rather than increasing risk indiscriminately.