Will Excel survive the insurance pricing revolution?

Insurers are modernising pricing, yet spreadsheets dominate workflows. Why hasn’t Excel gone away? asks Philip Harding

As a student in the late 1980s, I landed a summer job at a well-known insurance firm in London. Alongside a small army of other temps, my role was to trawl through reams of spreadsheet printouts, manually checking reconciliation errors following the rollout of a new technology system.

It was hardly glamorous, but the pay was decent. The following summer, I enquired about returning – only to find my former colleagues still working through the same problem.

I can’t say this experience endeared me to spreadsheets, but decades later, it seems the insurance industry’s love affair with Excel continues.

A recent Insurance Post survey, in conjunction with Optalitix, examined insurers’ efforts at pricing transformation, including the tools and processes used by actuaries and underwriters to support decision-making.

Among the findings, to be published as a series of reports on Insurance Post in the coming months, some 67% of respondents said they use Excel extensively in pricing, with a further 29% using it to a limited extent. 

At the same time, when asked about progress made with transformation, 72% said their pricing systems have already been modernised, or are in transition.

That may be seen as a contradiction but, alongside newer tools, Excel has survived multiple waves of financial technology for a reason. It is flexible, transparent and widely understood. In insurance pricing, those qualities matter. Underwriters need to interrogate outputs. Pricing teams need to iterate quickly. Commercial decisions need to be made, with a clear line of sight into how a number has been produced.

Increasing complexity

A key question in today's fast-changing environment is how to evolve as pricing becomes more complex?

But a key question in today’s fast-changing environment is how to evolve as pricing becomes more complex? Data volumes are increasing, models are evolving more quickly, and competition is intensifying. Spreadsheets were never really designed for that kind of environment – particularly where multiple data sources, audit requirements and cross-team collaboration are involved.

If Excel continues to sit at the centre of pricing workflows, how far can it realistically stretch as businesses grow? At what point do firms start to feel the limits – whether that is in data handling, governance or simply the time it takes to manage increasingly complex models?

Equally, if new pricing tools are introduced, how do they fit into the way underwriting and pricing teams already work? The survey hints that usability still matters as much as capability. Tools that are technically stronger may still struggle if they are harder to interrogate or slower to adapt in a live market.

And different stakeholders are not always seeing change in the same way. Many respondents report strong progress in pricing transformation, yet there is a sense, particularly from underwriters – that day-to-day workflows have not shifted as much as the underlying models. The gap between technical improvement and operational experience remains.

Productivity gains

Could AI be a catalyst for change? According to respondents, current expectations hinge more on reducing manual effort and speeding up routine tasks, rather than expecting a step change in pricing outcomes. The priority is making existing processes work better, rather than replacing them entirely.

Similarly the next phase of pricing transformation will rely on how different elements – models, data, tools and workflows – fit together in practice.

How insurers approach that balance, how underwriters and actuaries view the trade-offs, and how different parts of the market respond will be explored in Insurance Post in the coming months.

The Excel spreadsheet may not be disappearing any time soon. But the pressures building around it are starting to shape what comes next.

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