TOO MUCH TO DO, TOO LITTLE TIME
Long gone are the sleepy days of annual rate changes. In the fast-paced world of SME etrade, the battle to deliver an endless list of innovations, deals, fixes and rate changes is constant.
There is no silver bullet. Number-for-number rate changes may sound quick and easy, but it is rare for a rate change to leave underwriting untouched. No underwriter wants to lower their peril rates without considering the acceptance rules and clauses that directly alter the risk profile.
And at the same time, mass-customisation has reached the commercial insurance market. Every broker is looking to offer customers something special, and deals with insurers are the way to produce this without splintering products and processes into a labyrinth of product variants.
But underneath all the day-to-day rate changes and deals is the rapid change etrade products are experiencing, as underwriters and pricing teams better understand their portfolios. We live in an unprecedented time for data insight and powerful tools to move from pools of data to conclusions to product change. Yet these fundamental changes to product structures and pricing approaches mean that more-and-more products are having open-heart surgery – and this historically has blocked further change.
SEPARATING STRUCTURAL CHANGE FROM DOING BUSINESS
It’s no joke for a pricing team to be blocked from an important rate change. Profitability and credibility are on the line for every day that out-of-date rates are in the market. So any roadblock to this constant need for change rightly creates huge pressure.
With the latest Polaris ProductWriter release, Polaris have enabled true separation of structure from the rules and values that make up the product. What does this mean?
Almost all structural product changes involve fundamental change around how premiums are calculated. The perils and other rating factors are combined in new ways, while overrides, premium apportioning, cover protection and other product mechanics are often only changed as a wholesale change across the entire product suite.
But put aside the core calculation changes, which only happen on rare occasions. The vast majority of product changes are made up of key:
The great news is that all of these can be accommodated through an external file change, run entirely independently of the core algorithm changes, and even handled by separate teams.
ITS EASIER FOR PRODUCT WRITERS
says Christopher Davies, who heads up the rating team at Acturis.
“When designing a product to take advantage of External Tables you need to take a step back and consider what could now be controlled from a table.
“For pricing, rating tables no longer become dependent on groups, allowing flexible dimension updates alongside your standard rate drops.
On underwriting, those referral messages, transaction triggers and deal criteria for example, all once hardcoded in the ruleset logic can now be moved out and controlled directly through External Tables.
“This allows your scheme files to solely focus on the underlying logic, simplifying your scheme whilst providing greater flexibility for updates without lengthy ruleset changes.”
THE HIDDEN ADVANTAGES
But there are further hidden advantages that are coming out of External Tables:
IMPROVING THE SPEED OF CHANGE ACROSS THE UK MARKET
Polaris ProductWriter is the most commonly used rating tool for high volume robust etrade. By extending the external file functionality ProductWriter have allowed product owners to move at pace.
Here’s an example from last quarter:
Industry-wide changes to the Property Owners product class have necessitated fundamental changes to many insurers’ products. With timelines spanning multiple months and these changes requiring products to be frozen to all other changes, only those utilising the extended external file solution have been able to truly balance the requirements of change with BAU processes.
For one such product, soon after the freeze was implemented the pricing team identified a must-have pricing change that needed to be delivered as fast as possible. Instead of waiting for the end of the product freeze, the pricing team made the necessary changes to the External Tables and these were deployed on the live product without requiring any changes to be implemented by the ProductWriter team.
Not long after the pricing change was completed, the Deals team shook hands on a new broker deal. This involved a number of product changes driven by that agency. Once again, these changes could all be implemented within the External Tables, and were deployed on the currently live product without waiting for the product change delivery.
But what about the when the product comes out of its freeze? This is easily accommodated by taking the External Tables from the live product and applying to the new product version. So all the latest rate changes and deal variations will be immediately captured in the new product release.
One product, multiple changes, multiple teams – and everything delivered in parallel.
HOW PRODUCTWRITER CAN HELP YOU
If you want to know more about how you can benefit from External Tables please feel free to contact Polaris via [email protected] or contact Martin Thornhill on 07792 272648