Price Optimization in Insurance: A Work in Progress
The insurance industry is changing its approach with regard to product pricing. Price optimization is considered a major differentiator by many insurance players.
In a new report, Price Optimization in Insurance: A Revolution in Progress, Celent defines price optimization and explains how the insurance industry is currently changing the way product prices are determined.
“While the elements and parameters of new pricing techniques might seem obvious and relatively easy to understand for insurers, some aspects related to the implementation of a price optimization program need particular attention,” says Nicolas Michellod, Senior Analyst with Celent’s Insurance group and author of the report. “Insurers should avoid the temptation to view price optimization as a technology exercise and create a multifaceted IT strategy that provides a coordinating vision.”
This report demonstrates with a few concrete examples that price optimization can help insurers identify untapped business potential and increase their sales performance while generating higher underwriting profit. The report also provides Celent’s thoughts about the impact of price optimization on insurer business processes, the ease of IT undertaking, and the level of IT investment needed as well as the maturity of the technology available on the market.