A recent survey conducted by Coleman Parkes, on behalf of pricing decision intelligence leader hyperexponential, has unveiled the extensive dissatisfaction within the Specialty and Commercial insurance sectors regarding their current pricing and technology.
Despite having access to larger risk datasets due to digitalisation, insurers are struggling to extract value from their data and make better pricing decisions due to outdated pricing models and technology. The research comprised responses from 350 underwriters and actuaries, unveiling their concerns about current technology and pricing platforms.
Interestingly, the key data issues differ by country. For instance, US participants identified lack of real-time visibility into their portfolios as the primary issue, whereas UK participants pointed to challenging processes and internal compliance. Overall, the survey highlighted that existing technology does not adequately process large datasets and generate insights for enhanced risk pricing.
The study further highlighted that 83% of underwriters and actuaries believe their current technology requires improvements, while only 19% feel their technology empowers them to make data-driven decisions. Moreover, 56% of respondents expressed that their pricing platforms were underdelivering, with 45% noting that they haven’t seen any value from their newly purchased pricing technology.
A substantial amount of time is wasted due to these shortcomings, with underwriters spending approximately three hours per day on data entry. On average, US actuaries take 192 days to release new pricing models, while UK actuaries take 150 days. Rapidly evolving risk landscapes pose a significant barrier to underwriting, exacerbated by the time-consuming admin tasks.
Hyperexponential’s VP Customer and Consulting, Tom Chamberlain, provided his thoughts on the industry’s struggles with pricing, stating, “Pricing decisions are the most important lever insurers can pull on profit and loss, but few have been able to achieve meaningful transformation. Combined with the right data and technology, pricing insights can be used to make better business decisions. Our research shows a new generation of Specialty and Commercial insurers are painfully aware of these shortfalls and those who can embrace modern pricing technology and processes will win out.”
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