Skip to main content
Success Story

Upping the pricing ante in the life insurance market

Insurance Consulting and Technology
Insurer Solutions

December 18, 2019

We worked with the pricing and IT teams to set up Radar Live as the rating engine and in doing so met its key requirements of enhanced, more granular pricing, flexibility to change rates quickly, strong governance and real-time quote processing.

The client challenge

As has already occurred in large swathes of the property and casualty market, life insurers face increasing demands from digitalization for faster, more personalized pricing as part of an all-round better customer experience. A major U.K.-based insurer wanted to position itself strongly. It initially focused on its large protection book in which the company had experienced and addressed reducing profit margins in some lines of business and where legacy systems and inflexible processes meant that price changes could take up to six weeks to implement.


Our solution

In two separate projects, Willis Towers Watson helped the client transform pricing in its protection business using the Radar software suite as the basis for introducing agile and optimized pricing. We worked with the pricing and IT teams to set up Radar Live as the rating engine and in doing so met its key requirements of enhanced, more granular pricing, flexibility to change rates quickly, strong governance and real-time quote processing.

For the optimization work, we used our Emblem and Radar Base software to build demand and price elasticity models based on the client’s existing customer quote and policy conversion data, segmented by characteristics such as distribution channel, sum assured and age. After the results were reviewed and integrated into the client’s Radar suite, we trained in-house staff in the software and analytics techniques in order to meet the client’s wish to take control of decision making, and to make evidence-based, value-adding pricing changes, in line with the client’s business objectives and pricing principles.


The outcome

Rather than taking six weeks, the property and casualty insurer has seized a competitive advantage by being able to make price changes in under a day, while simultaneously gaining the ability to amend rating structures and add pricing factors without the need for any IT build. With the added capability of being able to assess the predicted impact of any proposed price changes in detail, allowing for a greater emphasis on differential pricing by distribution channel, the client now fully “owns” the optimization process. The real financial benefits: The company’s first, relatively cautious pricing change led to an increase of 3% in new business value, with further increases in value following.

Download
Title File Type File Size
Upping the pricing ante in the life insurance market PDF .2 MB

Related Solutions

Contact Us