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Pricing Elasticity Models Are Becoming Standard Practice for General Insurance – New Survey Shows
Newly published Earnix survey shows that 82% of Insurance companies with over €1B of Gross Written Premium use pricing elasticity models
London, UK, January 15th, 2013 – Earnix, a leading provider of Integrated Pricing and Customer Analytics™ solutions for banking and insurance, today announced the results of its latest industry survey: Pricing Practices in General Insurance. With the objective of uncovering pricing best practices used by insurance companies worldwide, survey respondents included 110 insurance executives and pricing professionals representing general insurance carriers and brokers from 27 countries.
Survey results highlights include:
• Price elasticity models are used by 51% of the survey respondents and over 82% of those with over 1 billion Euros Gross Written Premium.
• The top three challenges in the pricing processes are:
- Getting and utilizing competitor data
- Predicting the business impact of new rates
- Getting and utilizing the right customer data
• 44% of respondents report auto rate changes primarily driven by competition (44%).
• Social data is emerging as a new element used in price calculations.
• Those that have a common system in place for managing the pricing process across the organization are generally quicker to implement new rates.
• 38% of the respondents currently use pricing optimization and an additional 31% have plans to implement pricing optimization in the near future.
• While only 15% of the companies surveyed currently use real-time optimization, as many as 54% include real-time optimization in their future plans.
“This latest research gave Earnix the opportunity to gain the insight directly from carriers and brokers to best understand the industry’s pricing practices, challenges, priorities and strategies,” said Aviv Cohen, Earnix VP Marketing. “We are pleased to be able to share our findings to assist others in the insurance industry as they continue to evaluate their pricing models and put new processes and technologies in place to gain better access to needed data, determine the most appropriate pricing, and positively impact the bottom line.”
Complete results of the Pricing Practices in General Insurance, as well additional reports of industry research conducted by Earnix, can be found at http://www.earnix.com/resources/surveys/.
Earnix Integrated Pricing and Customer Analytics™ software empowers financial services companies to predict customer demand and its impact on business performance, enabling alignment of pricing and products with changing market dynamics. Earnix combines risk and demand modeling with real-time connectivity to core operational systems, bringing the power of analytic-driven decisions to every customer interaction. Banks and insurers rely on Earnix solutions to optimize deposit, loan, and policy prices. For more information visit www.earnix.com.
Aviv Cohen, VP Marketing