Earnix Blog > IT

Why Insurers Need a End-to-end Pricing & Rating platform

Earnix Team

October 7, 2021

  • IT
Aeriel Shot of a Bridge in a City

Siloed Pricing Systems and Approaches Don’t Get the Job Done 

Today, a surprisingly high number of insurance companies still use a patchwork approach to pricing and rating: manual efforts, homegrown or legacy solutions, and third-party, disconnected systems. 

Or maybe we should say “attempt to use,” since these cobbled-together frameworks inevitably lead to daily business challenges, and worse, prevent insurers from capitalizing on new and emerging opportunities. 

First up: A closer look at the many challenges caused by a fragmented approach to pricing and rating and the over-reliance on too many disparate solutions. 

How did we get here? 

When we start working with our clients, one of the first things we notice is the total number of tools they have in their pricing and rating architecture.  

Yet this outcome may not be surprising when you consider the path more insurers followed to arrive at this current state. For example, many still use legacy systems that their company has used for years (if not decades) such as mainframe-powered models. Or they may use homegrown applications and integrations they developed themselves to attempt to patch everything together. Finally, many insurers also use Microsoft Excel to maintain critical pricing data. 

Most insurance companies invested in innovations as new technologies hit the market, including big data analytics or machine learning-powered workloads. Yet these generally became third-party systems in an already overly complex architecture, requiring special integrations that didn’t always work as advertised or clunky workarounds to attempt to resolve connection issues. 

The need for a single, end-to-end pricing & rating solution 

While insurance companies and their embedded pricing teams had the best of intentions, more often than not, they wound up with a pricing software environment made up of too many tools, too much manual effort, and too much that could go wrong.  

For example, a common pricing and rating architecture may look something like this: 



What is immediately clear is that there are just too many steps—and too many systems—needed to do everything an insurance company needs to be successful today. Whether it’s developing and deploying effective pricing models, delivering a personalized quote, preparing management reports, or even maintaining governance and compliance, the environment pictured above makes it all extremely difficult. 

The other issue with this diagram is the multiple hand-off points. Each one represents a manual step or a potential point of failure where something—anything! —could go wrong as pricing teams attempt to manage inefficient workflows. 

One final observation: The environment pictured above doesn’t really show the many advanced technologies and new tools that are currently revolutionizing pricing processes. These include new innovations such as automation, governance and compliance, and even machine learning and AI-powered applications and workloads. They all add value, but in this case, they have to be retrofitted to the current architecture, which will only make the problem worse.  

Implications: Three challenges caused by overly complex pricing environments 

Just what are the issues with such a disconnected pricing and rating environment? We believe it falls into three different categories: difficult maintenance, slower times to market, and missed opportunities. 

Difficult maintenance 

Generally speaking, these approaches require far too much involvement from IT. Whether it’s troubleshooting integrations, implementing changes to pricing models, or redeploying those updated models, IT 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.  

Slower response times 

Often, these types of pricing processes prevent insurers from responding to real-time changes in the market. There are countless documented cases where it takes months to implement changes to pricing algorithms, a situation that makes it difficult—if not impossible—to present real-time, highly personalized offers before the competition.

Missed business opportunities 

Perhaps the biggest issue is the fact that it causes insurance companies to miss out on valuable tools that could have a significant impact on their business. For example, many end-to-end pricing and rating platforms, such as the Earnix Price-It solution, allow for more effective approaches to meet and respond to changing market dynamics and customers’ demands. Insurers can now take advantage of data science, AI, data modeling, and advanced reporting and analytics to increase revenue and strengthen their bottom line.  



Upcoming info on end-to-end pricing 

If the old saying is true—if every challenge is really an opportunity in disguise—most pricing environments can be improved and help insurers achieve better business results. Especially through the use of a true end-to-end pricing platform.  

The Earnix Price-It solution 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 take a closer look at all of the components available in the most innovative end-to-end pricing platforms. We’ll break it down to show you how these advanced technologies—such as automation, data science, machine learning/AI, data modeling, and more—are all helping today’s insurers become much more competitive. More, we’ll talk about the value of having all of these capabilities within a single, end-to-end pricing solution and give real-world examples. We hope you’ll check them out! 


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Earnix Team