Price Optimisation

DOWNLOAD: Price Optimisation Solution - Improve business performance by maximising the value of existing customers and sales enquiries

The EMB Difference
Non-Life insurers and intermediaries worldwide choose EMB’s price optimisation solutions because of: 

• potential loss ratio improvements of up to 3% at unchanged business volumes, representing double-digit percentage increases in portfolio profits
• solutions and tools developed specifically for non-life insurers, addressing their particular needs and issues, and which can easily be tailored to your organisation: 
   o flexible targeting of strategic volumes and profits KPIs, including volume-uplift scenarios
   o a unique, customer value-based optimisation approach
   o an effective multi-year optimisation approach  
   o flexible definition of insurance-specific profit contribution functions
   o flexible constraint definitions
   o allowance for product cross-holdings
   o scenario-testing and detailed impact analysis
   o sophisticated predictive price-elasticity models, combining GLM and other techniques
   o renewals and new business optimisations within a consistent strategic framework
   o experienced advice around common practical implementation and change issues, including optimal design of table-based solutions 
• our end-to-end software solution, incorporating familiar market-leading tools such as EMBLEM and Rate Assessor, alongside EMB Optimiser
• scope for progressive implementation, leading the client along an achievable optimisation “roadmap”, from effective simple approaches to full individual risk mathematical optimisation
• a successful implementation history, supported by case studies, within many territories, across multiple distribution channels, for both Motor and Home business
• EMB’s commitment to full knowledge transfer – no “black boxes” or costly ongoing consultancy commitments
• access to thought-leading EMB consultants with reputations for delivering practical, leading-edge pricing solutions


EMB Price Optimisation Solutions
EMB have developed sophisticated insurance price optimisation solutions to meet the needs of a wide range of clients, whether intermediaries or underwriters. These solutions are supported by a fully-integrated suite of tried-and-tested software products, including EMB Optimiser, a powerful tool designed specifically for individual risk mathematical price optimisation.

Whether an insurer or intermediary, challenging profit and volume KPI objectives may not be achievable through uniform profit loads or commission rates. Instead, applying loads which reflect individual risk competitiveness and customer behavioural characteristics can deliver significant improvements in portfolio performance, whether as immediate profit uplift, higher business volumes, or improvements in business mix.

EMB have developed and implemented many different techniques for determining optimised profit and commission loads. These techniques span a range of complexities to mirror the capabilities of your rating engine, from table-based component pricing solutions to full individual risk mathematical optimisation. As your rating engine develops, EMB’s optimisation solutions grow with it. EMB can support you through a phased implementation of price optimisation capabilities, from proof-of-concept, through “quick-win” solutions which exploit current rating engine capabilities, towards leading-edge solutions providing maximum profit uplift and wide flexing of strategic targets. Whichever solution is appropriate, EMB can provide consistent and complementary approaches for optimising your renewal portfolio and new business enquiries.

EMB are able to offer broad-based strategic advice on price optimisation issues in addition to market-leading software tools and technical analysis. EMB can support you with:
• strategic pricing advice, readiness assessment and optimisation foundation activities, regulatory issues and managing cultural change,
• advice on revised control cycle activities, roles and responsibilities, optimisation risk management and MI,
• rapid implementation interim optimisation solutions, delivering quick-win performance uplift and proof-of-concept support for further investment,
• building or refining technical optimisation components, including risk premium and price-elasticity of demand models. EMB are able to deploy novel proprietary elasticity modelling techniques, using the market-leading EMBLEM software in conjunction with other analysis tools,
• identifying distinct customer price-elasticity segments, and customer profitability analysis,
• providing software tools, and embedding these into the control cycle process,
• implementation support, training and knowledge transfer.

EMB Optimiser is a fast and flexible software tool for individual risk price optimisation, running in minutes even on large portfolios. Optimiser deploys a mathematical optimisation algorithm developed for and appropriate to the insurance industry, rather than borrowed from other financial services sectors, to ensure maximum profit uplift. Optimiser caters flexibly for individual risk and portfolio-level business constraints, enabling management to consider real-life strategic KPI scenarios, and has powerful diagnostic capabilities for sense-checking prices prior to implementation. It is fully compatible with EMBLEM and Rate Assessor, supporting elasticity models of many different forms and providing output to rating systems and the client’s MI suite.

To learn more about EMB’s experience in implementing leading-edge insurance price optimisation solutions, please contact Peter Lee or Stephen Jones.