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Basic Quote Calculation

A step-by-step guide to calculating a simple insurance quote using EverSharp Quote Extension.

Scenario

Calculate a new business quote for:

  • Product: Home Contents Insurance
  • Base Premium: £450
  • Customer Age: 35
  • No Claims Years: 3
  • Commission Rate: 15%
  • IPT Rate: 12%

Complete Script

// Step 1: Initialize Pricing Matrix
$SetCurrencyToPricingMatrix("GBP");
$SetCommissionRateToPricingMatrix(0.15);
$SetIptRateToPricingMatrix(0.12);

// Step 2: Add Base Premium
$AddItemToPricingMatrix("Contents Cover", 450.00, 1.0);

// Step 3: Apply No Claims Discount
// 3 years no claims = 10% discount
if (Customer.NoClaimsYears >= 3) {
    $AddFactorToPricingMatrix("No Claims Discount", 0.90, true, 0);
}

// Step 4: Add Admin Fee
$SetFeeToPricingMatrix(25.00);

// Step 5: Calculate Final Premium
$CalculatePremiumAdditive("NewBusiness");

// Step 6: Access Results
let totalPremium = Output.Premium;
let monthlyPayment = Output.Monthly.MonthlyPayment;

// Display to customer
$Log("Annual Premium: £" + $ToString(totalPremium));
$Log("Monthly Payment: £" + $ToString(monthlyPayment));

Step-by-Step Breakdown

Step 1: Initialize Pricing Matrix

$SetCurrencyToPricingMatrix("GBP");
$SetCommissionRateToPricingMatrix(0.15);
$SetIptRateToPricingMatrix(0.12);

What This Does:

  • Sets currency to British Pounds
  • Configures 15% commission rate
  • Configures 12% Insurance Premium Tax (IPT)

State After:

PricingMatrix = {
    Currency: "GBP",
    CommissionRate: 0.15,
    IptRate: 0.12,
    Items: [],
    Factors: [],
    Premium: 0
}

Step 2: Add Base Premium

$AddItemToPricingMatrix("Contents Cover", 450.00, 1.0);

What This Does:

  • Adds base premium item: £450
  • Quantity: 1.0 (standard)

State After:

PricingMatrix.Items = [
    {
        Name: "Contents Cover",
        Amount: 450.00,
        Quantity: 1.0
    }
]

Step 3: Apply Discount

if (Customer.NoClaimsYears >= 3) {
    $AddFactorToPricingMatrix("No Claims Discount", 0.90, true, 0);
}

What This Does:

  • Checks if customer has 3+ years no claims
  • If yes, applies 10% discount (factor of 0.90)
  • accumulative: true means it multiplies the current premium
  • applicability: 0 means applies to all items

Calculation:

Base Premium: £450.00
After 10% discount: £450.00 × 0.90 = £405.00

Step 4: Add Admin Fee

$SetFeeToPricingMatrix(25.00);

What This Does:

  • Adds £25 admin fee
  • Fee is subject to commission and IPT

Step 5: Calculate Final Premium

$CalculatePremiumAdditive("NewBusiness");

What This Does:

  • Processes all pricing matrix components
  • Calculates commission on each item
  • Applies IPT
  • Generates ledger entries
  • Populates Output object
  • Calculates monthly payment breakdown

Full Calculation:

Contents Cover (after no claims discount):
  Net: £405.00
  Commission (15%): £71.47
  Gross: £476.47
  IPT (12%): £57.18
  Total: £533.65

Admin Fee:
  Net: £25.00
  Commission (15%): £4.41
  Gross: £29.41
  IPT (12%): £3.53
  Total: £32.94

Final Premium: £533.65 + £32.94 = £566.59

Step 6: Access Results

let totalPremium = Output.Premium;           // £566.59
let monthlyPayment = Output.Monthly.MonthlyPayment;  // ~£49.48

Output Structure:

Output = {
    Premium: 566.59,
    IptApplied: 0.12,
    Monthly: {
        MonthlyPayment: 49.48,
        Deposit: 98.96,
        NumberOfPayments: 11,
        TotalPayable: 643.24
    }
}

Ledger Breakdown

The calculation generates these ledger entries:

Ledger = [
    {
        LedgerSection: "Policy",
        EntryType: "Item",
        Description: "Contents Cover",
        NetAmount: 405.00,
        CommissionAmount: 71.47,
        TaxAmount: 57.18,
        TaxRate: 0.12,
        TaxType: "IPT",
        GrossAmount: 533.65,
        Currency: "GBP",
        IsReversal: false
    },
    {
        LedgerSection: "Fee",
        EntryType: "Regular",
        Description: "Admin Fee",
        NetAmount: 25.00,
        CommissionAmount: 4.41,
        TaxAmount: 3.53,
        TaxRate: 0.12,
        TaxType: "IPT",
        GrossAmount: 32.94,
        Currency: "GBP",
        IsReversal: false
    }
]

Adding Complexity

Optional Add-Ons

// After base premium, before calculation

// Legal Expenses Cover (optional)
if (Customer.WantsLegalExpenses) {
    $AddAddOnToPricingMatrix(
        "Legal Expenses",  // name
        25.00,             // net rate
        0.15,              // commission rate
        0.12,              // IPT rate
        true,              // is refundable
        true,              // discount allowed
        false              // is full premium MTA (pro-rated)
    );
}

// Home Emergency Cover (optional)
if (Customer.WantsHomeEmergency) {
    $AddAddOnToPricingMatrix(
        "Home Emergency",
        45.00,
        0.10,
        0.12,
        true,              // is refundable
        true,              // discount allowed
        false              // is full premium MTA (pro-rated)
    );
}

$CalculatePremiumAdditive("NewBusiness");

Age-Based Pricing

// Calculate age
let customerAge = $CalculateAge($Today(), Customer.DateOfBirth);

// Age-based base premium
let basePremium = 450.00;

if (customerAge < 25) {
    basePremium = 600.00;  // Higher risk
} else if (customerAge > 70) {
    basePremium = 550.00;  // Elevated risk
}

$AddItemToPricingMatrix("Contents Cover", basePremium, 1.0);

Territory-Based Factors

// Apply territory risk factor
if (Customer.PostcodeRisk == "High") {
    $AddFactorToPricingMatrix("High Risk Area", 1.35, true, 0);
} else if (Customer.PostcodeRisk == "Low") {
    $AddFactorToPricingMatrix("Low Risk Area", 0.85, true, 0);
}

Complete Enhanced Example

// Customer data
let Customer = {
    DateOfBirth: $ToDate("1988-05-15"),
    NoClaimsYears: 5,
    PostcodeRisk: "Medium",
    ContentsValue: 50000,
    WantsLegalExpenses: true,
    WantsHomeEmergency: false
};

// Initialize
$SetCurrencyToPricingMatrix("GBP");
$SetCommissionRateToPricingMatrix(0.15);
$SetIptRateToPricingMatrix(0.12);

// Calculate age
let age = $CalculateAge($Today(), Customer.DateOfBirth);

// Age-based pricing
let basePremium = 450.00;
if (age < 25) { basePremium = 600.00; }
else if (age > 70) { basePremium = 550.00; }

// High value adjustment
if (Customer.ContentsValue > 40000) {
    basePremium = basePremium * 1.15;
}

$AddItemToPricingMatrix("Contents Cover", basePremium, 1.0);

// No claims discount
if (Customer.NoClaimsYears >= 5) {
    $AddFactorToPricingMatrix("No Claims Discount", 0.85, true, 0);  // 15% off
} else if (Customer.NoClaimsYears >= 3) {
    $AddFactorToPricingMatrix("No Claims Discount", 0.90, true, 0);  // 10% off
}

// Territory factor
if (Customer.PostcodeRisk == "High") {
    $AddFactorToPricingMatrix("High Risk Area", 1.35, true, 0);
} else if (Customer.PostcodeRisk == "Low") {
    $AddFactorToPricingMatrix("Low Risk Area", 0.85, true, 0);
}

// Optional coverages
if (Customer.WantsLegalExpenses) {
    $AddAddOnToPricingMatrix("Legal Expenses", 25.00, 0.15, 0.12, true, true, false);
}

if (Customer.WantsHomeEmergency) {
    $AddAddOnToPricingMatrix("Home Emergency", 45.00, 0.10, 0.12, true, true, false);
}

// Admin fee
$SetFeeToPricingMatrix(25.00);

// Calculate
$CalculatePremiumAdditive("NewBusiness");

// Results
let result = {
    CustomerAge: age,
    AnnualPremium: Output.Premium,
    MonthlyPayment: Output.Monthly.MonthlyPayment,
    Deposit: Output.Monthly.Deposit,
    LedgerEntries: $Count(Ledger)
};

$Log("Quote Result", result);

Testing the Quote

// Validate premium is within expected range
if (Output.Premium < 100 || Output.Premium > 2000) {
    $Log("Warning: Premium outside normal range");
}

// Verify ledger matches output
let ledgerTotal = $Sum($Map(Ledger, fn(e) => e.GrossAmount));
let difference = $Abs(ledgerTotal - Output.Premium);

if (difference > 0.01) {
    $Log("Error: Ledger mismatch");
}

// Check monthly payment calculation
let expectedTotal = Output.Monthly.Deposit +
                   (Output.Monthly.MonthlyPayment * Output.Monthly.NumberOfPayments);
let monthlySumDiff = $Abs(expectedTotal - Output.Monthly.TotalPayable);

if (monthlySumDiff > 0.01) {
    $Log("Warning: Monthly payment calculation discrepancy");
}

Next Steps