Analysts
INSURANCE RATING AND PRICING OPTIMIZATION: INCREASING PROFIT THROUGH CLOUD-BASED ANALYTICS
An SMA Perspective
“Insurance rating and pricing is an area where even small improvements have an outsized impact on profitability… Combining advanced models with a cloud-based solution is a novel approach that opens up new opportunities for pricing optimization… “
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by Ellen Carney with Eric G. Brown and Christina Lee”Earnix improves the profitability of P&C insurers by taking them beyond simply pricing for risk to pricing based on the policy holder’s lifetime value.””Capabilities like predictive analytics mean that personal lines insurers can better understand their customer needs so they can offer the most appropriate products and prices.”
“Over the long term, Earnix has a bright future in the US market, as US insurers that find themselves in a fierce competitive landscape realize that they need to reduce customer acquisition costs through higher retention and improve profit per customer.”Jonathan Steiman, Analyst, Financial Services Technology, Datamonitor.
WHAT OTHER ANALYSTS ARE SAYING
“Price Optimization technology is an essential underpinning for the dynamic pricing model and the emerging commensurate value relationships strategies.”
Gartner, Inc. Price Optimization for Banking, 2007
Richard De Lotto
Principal Analyst, Banking
March 2007
“As the value of product portfolios reaches into the billions, minute differences in interest rates can have a material impact on overall bank profitability. Pricing and revenue optimization, also referred to as profit-based pricing, represents a movement towards greater precision in the pricing process.”
Bobbie Britting
Senior Analyst, Consumer Lending, TowerGroup
From FST Magazine, Q2 2008
“As banks find margins becoming tighter as many services become more commoditized, getting to know where a customer’s “breaking point” is in terms of pricing can be the difference between maximum profitability, or losing that customer to a competitor. One of the challenges is there’s not an understanding of elasticity of pricing.”
Kathleen Khirallah
Research Director, Retail Banking, TowerGroup
From Bank Technology News, September 2006
