’Combined with the right data and technology, pricing insights can be used to make better business decisions,’ says vice president

Onerous processes and internal compliance are the “biggest data issues” when it comes to pricing decisions in the UK market’s specialty and commercial (re)insurance lines, according to Hyperexponential.

In a statement released today (19 July 2023), the firm revealed more than half of underwriters and actuaries (56%) stated their pricing platforms were failing to deliver what was promised. 

And 45% that had purchased new pricing technology reported that they were yet to realise value from it.

Hyperexponential obtained the findings from a survey of 245 underwriters and 105 pricing actuaries working in the speciality and commercial (re)insurance lines across the UK and the US during May 2023.

This was carried out by research firm Coleman Parkes on behalf of Hyperexponential.

Tom Chamberlain – vice president of customer and consulting at Hyperexponential – said “pricing decisions are the most important lever insurers can pull on profit and loss”.

However, he added that specialty and commercial lines insurers “still think pricing is just a one-time number, when [actually] it is so much more than that”.

’Painfully aware’

Hyperexponential noted that it currently takes around 150 days for UK actuaries to release new pricing models – compared to 192 days for actuaries in the US.

However, the survey revealed that 83% of underwriters and actuaries believe technology needs to be improved, with only 19% stating the technology currently on offer allows them to make data-driven decisions.

And Hyperexponential highlighted that underwriters and actuaries were having to “waste valuable time on admin tasks”.

“Combined with the right data and technology, pricing insights can be used to make better business decisions,” Chamberlain said.

“Our research shows a new generation of specialty and commercial insurers are painfully aware of these shortfallings and those who can embrace modern pricing technology and processes will win out.”

He added that “insurers need pricing decision intelligence” to create an “iterative feedback loop between their data, insights and decisions”.

“Today, specialty and commercial insurers have the potential to price and assess risk more accurately than ever before using IoT [internet of things], drones, social media, dash cams, and wearable technology such as smart watches,” he added.

5_IT_MGASURVEY_2023_Email static 320x126

Influence your MGA partners by sharing your thoughts on their performance over the last 12 months. Share your voice to receive the MGA 2023 Executive Summary and have your name entered into a prize draw to win £250 John Lewis vouchers. Click here to enter!