Pricing & Analytics: Revolution or Evolution?
Survey 2022 - Europe
The technical landscape in insurance has witnessed rapid development in recent times. Tools and techniques that were considered arcane just a few years ago are now widely used. To stay ahead of this evolution, it is key to be aware of the relevant trends. This is why we launched the 2022 survey, with a focus on the European market.
Summarising the core messages from this second edition, it is clear that answers vary according to individual companies’ profiles and the compositions of their pricing teams. However, some shared traits could be observed across markets and company sizes.
Usage of external data has become almost a standard by now. With more than two thirds of the participants answering that they include external data in their pricing process, the role of data providers as key partners to the insurance industry has also solidified.
Another clear trend can be seen in the field of Machine Learning (ML). While our last survey showed that the overall usage of ML techniques was still lagging behind what had been expected some years ago, the application of ML is gaining more and more traction, and the areas of deployment are expanding continuously. In particular for Automated Machine Learning (AutoML), which one in three companies are using or testing, and nearly two thirds are interested in exploring, the vast majority of respondents expects this trend to grow in relevance.
Finally, regarding IT infrastructure, it is not yet standard to automate data processing using APIs, and more than half of insurers don’t leverage cloud capabilities. There is, however, a clear correlation between IT infrastructure and pricing sophistication in general, so any player wishing to apply advanced methods will be confronted with the decision whether or not to invest in this area.