SAS: Risk-Based Pricing: The Steps to Initiate a Risk-Adjusted Framework

There are some factors that require careful consideration before the development and implementation of a risk-based pricing framework. This paper outlines those factors and provides a quick methodology to begin instantiating risk-based pricing when other processes, such as an economic capital framework, have not yet been implemented. This methodology makes it possible for institutions with a less sophisticated enterprise risk management (ERM) framework to differentiate customers based on their