VIC 2024: The Future of Pricing Solutions

At the recent Verisk Insurance Conference in London one of the discussions dived into “the art of the possible” in London Market pricing.

Taha Ahmad, Director of Pricing Solutions at Verisk Specialty Business Solutions, moderated the session. The panel was formed by Alice Boreman, Actuarial Transformation Partner at professional services provider EY;  Sunil Kamath, Senior Vice President at Allied World and Active Underwriter of Syndicate 2232; and Toks Ahmed, Syndicate Actuary for Cincinnati Global Underwriting. 

A quick show of hands at the start of the session evidenced that the packed out room was made up of a balanced mix of specialists in pricing, underwriters and technology and operations experts.

The business case for a pricing transformation

Alice Boreman described the focus of her role as being not just “buying a new toy: a new pricing tool” but rather about how to get value out of it as a business and what wider operational changes need to be made in order to enable that value creation. Both Toks Ahmed and Sunil Kamath agreed with this statement, identifying it as a  priority in their roles as well.

For Sunil, in a market that is softening in certain areas it is paramount that pricing transformation journeys show a demonstrable value, one that can be maintained or even deepen as more data is added. Toks added that one of the burning issues surrounding Cincinnati’s pricing transformation has been around connecting and harmonising claims information and being able to use it to inform pricing and analytics in order to create value.

Getting pricing entries and underwriters to be much more in lockstep was also identified as an ongoing challenge. But, it was deemed necessary in order to enable underwriters to get the value they can out of their pricing entries, in the right way and in a cost effective way. Alice pointed out that the cost of doing business in the London Market had been brought up in several sessions throughout the day, and that in order to remain globally competitive in the future all measures that are cost efficient, such as reducing rekeying of information, should be welcomed.

Sunil shared that double keying was definitely one task they wanted to remove from underwriter’s plates, but also added that “there’s a lot more value in the data than just getting the right loss ratio: triaging, renewal workflow, even just issuing policies in a streamlined way”.

Enhanced connectivity leading to better portfolio selection

The panellists agreed that so far many companies have focused on “lifting and shifting”, i.e. moving their excel based pricing models onto their new technology platform. While this solves some of the issues, like rekeying and centralisation, it is not enough to see incremental benefit over time. “What excites me is having collaboration across the organisation”, said Toks, “when you can bring all this information and harness it and make it so that everyone has it at their fingertips, that’s how you can push the business forward and achieve your strategic goals”. 

Alice added that having a baseline of common metrics is necessary to inform conversations. She said “you need some kind of common core as leadership to look across your portfolio and be able to challenge the lead underwriter in a particular line about what's going on in the book, why they should continue to invest in it, what actions they want them to take, and holding them accountable to that. Unless you have at least a baseline of common metrics it's really hard to make those calls and have rich conversations. Technology enables you to drive that in business.”

Sunil added that getting systems connected and talking to each other is the next phase of any pricing journey, along with trying to pick which systems provide the most incremental value without adding expense, burden of time or headcount. He said “that's probably the challenge for the next couple of years, where maybe the market is moving in a direction that's not just growth mode. How do we pick the things that will demonstrate value quite tangibly, while creating those building blocks that will move us forward into that next phase?”

Verisk Specialty Business Solutions is exhibiting at the GIRO Conference 2024, which attracts the top industry experts and thought leaders across the leading edge of the actuarial profession.

GIRO is attended annually by over 800 delegates and speakers who are keen to discuss topics such as Pricing, Reserving, Modelling and the future of the insurance industry.

Come and meet Taha Ahmad, Director of Pricing Solutions and our team to discuss "the art of the possible" in London Market pricing.