jacky garg, 1273557, Mba 4 F1, Comment on Product pricing, innovation and simplicity in Non-Life Insurance

Introduction

Product pricing

Competition is forcing insurers to adjust rates more frequently to retain existing customers and attract new ones. Insurers looking to implement a price optimization strategy must consider these essential components.

• Information management. Key to the success of using price optimization is the quantity and quality of the available data, especially claims and customer data.
• Data exploration. The emergence of business analytics software, like data exploration and visualization tools, helps insurers refine their analysis and evaluation of certain risk elements. For example, 20 years ago, credit score was probably deemed unimportant. Now it is probably the most used variable in determining premium rates.
• High-performance analytics. To process the large data quantity and perform complex analytical calculations, insurers need an in-memory or distributed computing environment.

Simplicity of non life insurance

The MS&AD Insurance Group is developing business processes utilizing the Internet and PCs to make products and services simpler and more convenient for customers. We also have systems to provide information about insurance products and services to a wide range of customers regardless of age and ability.

MSI offers "SumaHo," a free application for smart phones.
 

Innovation

The word “innovation” means different things to different people. For some, it only refers to groundbreaking discoveries that fundamentally change the competitive landscape. Against that benchmark, many observers perceive that insurers are slow to embrace product innovation, especially when applied to non-life insurance. But according to Swiss Re’s latest sigma publication “Product innovation in non-life insurance,” innovation in non-life insurance is more common than believed, although it tends to happen incrementally and be transaction led.
Conclusion

“Insurance has a poor image of not being very innovative, but often people don’t appreciate the range and degree of risks that insurers routinely take on,” Pain says. Cyber insurance, supply chain disruption cover, and alternative risk transfer solutions are all recent examples of innovations in non-life insurance. Yet in developing new products, insurers always need to be cautious that innovations do not overstep the boundaries of insurability.

The London Market provides a focus for many insurance companies and syndicates operating under a Lloyd’s of London banner to write large commercial risks such as supermarkets, football players and other very specific risks. It consists of a number of insurers, reinsurers, [P&I Clubs], brokers and other companies that are typically physically located in the City of London. Business is typically written through specialist brokers. The London Market also participates in personal lines and commercial lines, domestic and foreign, and provides reinsurance.