The next generation of pricing actuaries
Pricing and underwriting represent a key pillar of personal lines insurance. The recent development in technology and digitalisation has boosted pricing sophistication to the next level, enabling many insurers to transition to a digital ecosystem.
Though the prediction remains the goal of all pricing exercises, the decision-making process is fundamental and increasingly recognised as such in order to thrive in a competitive environment. The models’ outcomes represent only one component of the business strategy: the interpretation of these models in light of the company strategy and competitors’ directions is imperative.
The live rating-engine software already contributed to shifting control from the IT department towards the pricing department. But only the recent birth of the automated machine learning field is changing the role of the pricing department, bringing it to the centre of the decision-making process and having a huge impact on the governance of insurance pricing teams.