Trends in Property/Casualty Rating
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| Boston, MA, USA November 29, 2005 |
Yesterday痴 rating technology may not be up to the task, as innovation is creating immense rating complexity.
Pricing property/casualty risks used to be relatively straightforward. But with rising competitive pressures, the challenges in rating are outpacing traditional rating tools and approaches.
"Carriers are rethinking their rating strategies in search of operating efficiency, higher channel satisfaction, and improved profitability," says Craig Weber,senior analyst and author of the Celent report, " ." And many carriers are finding that they need better technology to support those new strategies.
Weber notes that many carriers are rethinking their custom-built rating solutions that have been around for years, in favor of vendor-based solutions that offer significantly improved out-of-the-box functionality. "Even though some customization is always necessary, new tools make it easier for carriers to build, maintain, and integrate their rating systems," Weber says.
The trend report notes that US carriers will spend over US$800 million on rating systems in 2006. Much of that total will go toward internal staff and custom development. But over US$300 million will be spent with external software vendors and consultants. (See Figure 1.)
The report also analyzes several key trends, including the following:
A companion report, "Property/Casualty Rating Engine Vendors," provides detailed analyses of 13 vendors that are active in the property/casualty rating space, including CGI, Computer Sciences Corporation, Decision Research Corporation, Duck Creek Technologies, IDP, Insurity, ISO, OneShield, Rackley Solutions, Insbridge/Skywire Software, Steel Card, The Innovation Group, and Trilogy.
A table of contents for the report is available online.
of Celent's Property/Casualty Insurance research service can download the report electronically by clicking on the icon to the left. Non-members should contact firstname.lastname@example.org for more information.