In the first blog article of our end-to-end pricing and rating series, we highlighted the benefits that a true end-to-end platform can deliver and described the many challenges caused by disparate, siloed pricing and rating engines.
In that article, we described some of the game-changing technologies and capabilities that are now available in the most innovative pricing and rating platforms. Some of these are just emerging and becoming mainstream now, so not every insurance company is fully aware of their total value—and how they can contribute to the company’s bottom line.
In this article, we’ll take a deeper dive and a closer look at each of these critical technologies. We’ll focus first on automation, an often-overlooked capability in a pricing platform, but still a profoundly important part of it.
The Challenges Caused by Manual Pricing Efforts
But first, why do we even need automation? Don’t most pricing processes and workflows perform well enough?
Unfortunately, the answer to the second question is no. Today, fast, efficient pricing is critical to every insurance company’s success. Yet most pricing approaches still require too much manual effort as pricing teams attempt to develop and deploy pricing models and offers.
The underlying reasons are understandable. Most insurance companies have not yet implemented a modern, fully integrated and sophisticated pricing and rating solution and many still rely on a surprisingly high number of legacy systems. In fact, it’s not uncommon for insurers to attempt to use multiple rating and pricing systems especially for different channels or in various parts of the business.
It all adds up to a patchwork environment of non-integrated, siloed systems waste valuable time and effort. In turn, this affects the company’s pricing agility and speed to market. For example, many legacy-based pricing models are so difficult to use, pricing teams can’t even make simple updates themselves.
As a result, it often takes weeks or even months to make even the most basic pricing updates. When you consider this example from an internal perspective, it is clear evidence of internal inefficiencies and a lack of productivity that most companies seek to avoid. Yet it also means that the insurance company is most likely missing out on opportunities in the market since it takes too long to develop and deploy attractive offers before the competition.
Additionally, such an architecture inevitably results in multiple hand-off points. Each one represents an additional manual step or a point of failure when something could go wrong as pricing teams attempt to manage a high number of inefficient, manual workflows. Finally, this type of approach requires too much involvement from valuable IT staff. But IT really shouldn’t have to be involved in this type of work. Instead, removing this burden can free them to focus on higher value, more strategic work.
Legacy-based approaches also lead to too many errors. It’s a real challenge since finding and fixing errors can be extremely time-consuming and inevitably leads to too many inefficiencies and a tremendous exposure to risk. The good news is that automation can eliminate these issues.
The Power of Automated Pricing
Today, powerful automation tools help insurance companies eliminate all the manual work once associated with the pricing process. This includes complex tasks, such as data management, updating business rules, price options and versions, and simulations and models.
It adds up to a powerful advantage. Automation helps reduce the time it once took to calculate and deploy pricing since it frees team members from having to manually enter data, adjust models and simulations, and manage other time-consuming steps. But it also helps eliminate errors, free internal bottlenecks, and enable pricing teams to develop more successful pricing and product-personalization offers.
What to Look for in an End-to-End Automation Solution
Effective automation capabilities provide the following benefits:
- Ease of use: Automation tools should be user-friendly and intuitive, so users can easily develop custom scripts to automate just about any part of your pricing or product-personalization process. This alone can accelerate pricing model development from weeks and months to just days. Even better, in specific cases, these models can deliver pricing offers to customers in mere seconds, which can be a key differentiator.
- Comprehensive automation options: Automation solutions should also provide a full library of commands that support data management, modeling, deployment, monitoring, and more.
- Full integration: It’s important that any user be able to access and use a full range of automation capabilities. This means all automation scripting and analytical work can be done without the need to use other environments or tools.
- Improved consistency—and control: Modern pricing platforms, such as Earnix Price-It, let users define pricing tasks, script the automation, validate, and test. Once complete and live, these newly automated processes are much more consistent and provide the opportunity for improved monitoring.
- Increased governance: Finally, powerful automation capabilities let insurers capture and archive all workflows and activities. Such complete governance helps with recordkeeping, audits, and compliance.
Advantage of a Modern Pricing Platform
Today, there’s a real opportunity for insurance companies to take advantage of valuable tools that could have a significant impact on their business. For example, end-to-end pricing software , such as the Earnix Price-It solution, offer a wide array of proven, next-generation technology—all within a single platform. A solution that enabled a leading North American insurance carrier to reduce the time it took to make pricing changes, from 180 days to just 4 days. Insurers can now take advantage of data science, AI, data modeling, and advanced reporting and analytics to increase revenue and strengthen their bottom line.
Many insurance companies have discovered that faster, more personalized insurance offers help them reach customers in the moments that matter. They are able to beat the competition, connect with customers and prospects, and win more business. This helps generate new revenues, gain long-term profitable customers, and identify new opportunities for cross-selling bundles and add-ons. Plus, with an extremely fast time to value, solutions like Price-It deliver an impressive ROI to further strengthen the bottom line.
Earnix delivers everything you need to manage your entire pricing and rating process, including telematics data for usage-based insurance (UBI), data management, advanced modeling capabilities using the latest machine learning and AI technology, automation, and reporting and analytics.
Stay tuned for future articles where we’ll show you how other advanced technologies—such as data science, machine learning/AI, data modeling, and more—are all helping today’s insurers speed up time-to-market and become much more competitive. More, we’ll talk about the value of having all these capabilities within a single, end-to-end pricing solution and give real-world examples.
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