Pricing at pace – staying competitive in a faster-moving market

In increasingly fast-moving and volatile insurance markets, the ability to rapidly access and act on pricing insights is more important than ever. Vicki Summerhayes reports.

This article explores the key themes emerging from a recent Insurance Post roundtable, hosted in association with Optalitix, with additional insights from senior industry practitioners. It examines the role pricing teams are playing in helping insurers stay competitive and the growing influence of pricing insights on wider business strategy and decision-making.

Roundtable attendees:

• Chris Gorton, head of pricing, C-Quence
• Shyam Bhayani, director of pricing, insights and exposure management, Aviva
• Leon Jones, vice-president, pricing fundamentals, Intact
• Tom Mayo, head of technical underwriting, Allianz
• Greg Gwilliam, head of insurance, Optalitix
• Emma Ann Hughes, editor, Insurance Post (moderator)

Additional contributors:

• Carys Lawton-Bryce, chief operations officer, Markel International
• Richard Walker, director of product, portfolio and capacity, Bspoke Group

 

Rapid pace of change 

“The current pace of change is relentless,” said Tom Mayo, head of technical underwriting at Allianz, capturing a sentiment that echoed throughout the roundtable. “Pricing pace and agility are therefore fundamental.”

Commercial insurers are navigating rapidly changing market conditions. “The soft market has added to those pressures considerably,” said Chris Gorton, head of pricing at C-Quence. “Being able to segment our portfolio, choose where to target rates and when to walk away adds a huge advantage. But we are constantly evolving – we don’t get to stay still.”

Pricing transformation as a cross-functional priority

With pricing capabilities increasingly viewed as an important competitive differentiator, there have been fundamental changes in the role of pricing teams and the expectations placed upon them. “Pricing has changed massively in the last three to five years,” observed Shyam Bhayani, director of pricing, insights and exposure management at Aviva.

For many insurers, it has been a transformation priority. “At Allianz, pricing is a cornerstone of our transformation program,” explained Mayo. “It’s seen as the big lever in terms of competitive advantage and driving the business forward successfully.”

Roundtable attendees reported significant investments in pricing teams, richer data, and integrated pricing and underwriting platforms.

While many organisations are moving away from spreadsheets to harness the benefits of these new pricing tools and platforms, it can be a challenging cultural hurdle. A recent Insurance Post survey conducted in partnership with Optalitix found 87% of insurers still use Excel for pricing, with 65% reporting heavy reliance, particularly among underwriters.

“There is a perceived level of trust and transparency that comes with using Excel for 25 years. It is a difficult comfort blanket to take away from people,” noted Leon Jones, vice-president of pricing fundamentals at Intact.

Carys Lawton-Bryce, chief operations officer at Markel International, underlined that pricing transformation success depends on providing underwriters with tools that are “practical, trusted, and designed around the realities of their work”.

For teams to fully embrace new ways of working, Greg Gwilliam, head of insurance at Optalitix, also stressed the importance of demonstrating tangible value. “It’s not just about focusing on the negatives of Excel, but explaining the benefits of new tools and techniques, whether that’s speed, richer data, system connectivity or reducing double entry,” he said.

Bhayani agreed, emphasising early engagement: “We brought underwriters along on the journey right from the start, showing them what the new tools could do. Transformation is not just a pricing project,” he added. “To do it properly, you’ve got to have buy-in across the business.”

Having alignment across pricing, underwriting, technology, data, distribution and executive leadership from the beginning is important. At Markel, Lawton-Bryce said the cross-functional pricing transformation team “builds pricing capability with the business, rather than around it”, bringing together insurance, actuarial, software development, operations and technology expertise.

It’s not just about focusing on the negatives of Excel, but explaining the benefits of new tools and techniques, whether that’s speed, richer data, system connectivity or reducing double entry.

Greg Gwilliam, Optalitix

Greater focus on portfolio management

As pricing capabilities develop, the focus is moving beyond individual risk pricing towards portfolio management, with pricing teams playing a greater role in driving targeted growth and managing margins.

“We’ve moved past simply delivering a risk-based price to an underwriter and wishing them good luck, to providing proper segmented analysis,” said Intact’s Jones. “That shift from the cost of production to providing guidance on good trading decisions is a big change.”

Data plays a pivotal role in unlocking these portfolio insights. However, simply having more data does not necessarily create an advantage. “Lots of companies have access to the same external data sources. The real edge comes from using them intelligently,” noted C-Quence’s Gorton.

Execution speed is equally critical. “If you uncover a valuable data source, it won’t be too long before the rest of the market has it too,” explained Allianz’s Mayo. “The competitive advantage comes from deploying it quickly, enhancing it with your own data and experience, and using it to price in a more sophisticated manner.”

Lots of companies have access to the same external data sources. The real edge comes from using them intelligently.

Underwriters are therefore increasingly looking to pricing teams for more insights. Rapid segmentation and granular portfolio analysis can help insurers identify areas of strong performance and pinpoint those needing improvement, targeting areas for improved conversion, retention or profitability. The result is a more informed approach to deciding where to grow and when to apply more discipline.

Pricing moving from the back office to the boardroom

That broader portfolio role means pricing leaders play an increasingly important role in supporting the C-suite, with greater involvement in strategic decision-making.

“Pricing capabilities are becoming a wider source of strategic insight because they add a new lens to traditional performance data,” explained Markel’s Lawton-Bryce. “As pricing data becomes richer and more connected to underwriting, operations and portfolio management, it allows us to analyse performance in more detail and support decisions well beyond rate adequacy. That insight will increasingly shape portfolio optimisation, capital allocation, growth planning, remediation activity and operational decision-making.”

“Pricing teams now have a much stronger voice and are often the first port of call when it comes to looking for new opportunities,” added Jones. “Our job is to shift decision-making from being anecdote-led to data-led. Executive teams now have direct and rapid access to insights that they trust.”

Mayo agreed that the pricing voice is increasingly understood and valued, with data and experience lending credibility to its contribution.

For executive leaders to turn pricing insights into action, clarity, consistency, and alignment across lines of business are critical. Richard Walker, director of product, portfolio and capacity at Bspoke Group said executives need clearly defined targets and tolerances along with data that can quickly identify when a book is moving outside agreed parameters.

“We use dashboards and KPIs to monitor performance and effectively course-correct at a macro level, while empowering the experts within individual businesses to make decisions on individual risks and portfolios,” he explained.

[Pricing] insight will increasingly shape portfolio optimisation, capital allocation, growth planning, remediation activity and operational decision-making.

Carys Lawton-Bryce, Markel

The changing pricing skillset

This evolution is placing new demands on pricing teams, requiring a far broader mix of skills that span actuarial expertise, technology and data capabilities, communication, and change management.

“The role of the pricing actuary is changing, with very different responsibilities and skills compared to even five years ago,” explained Jones.

Pricing teams can increasingly make changes without relying on IT teams or waiting for wider technology delivery cycles. While attendees described this as a much-sought-after development that enables faster, more frequent rate changes, it also brings challenges around skills and resourcing.

“It’s a different structure and way of working,” noted Optalitix’s Gwilliam. “While it’s quicker, more of the work is falling onto pricing and underwriting teams and they’ve got to fit that into their day job.”

The increasing demands for faster change and deeper insights mean resourcing within pricing teams can be a significant challenge. “Pricing teams tend to be quite small and, as a result of working more closely with other functions, they are now less insulated,” said Gorton. “You’re not just juggling your own work; you’ve got other teams coming to you with requests for information and a lot more demands hitting your desk.”

AI: freeing pricing teams from the admin 

It’s not just about pulling the lever; it’s also about recognising and understanding the impact.

Tom Mayo, Allianz

Technology may provide some relief from these pressures, with AI already being deployed to allow staff to focus on higher-value tasks. Practical use cases outlined by pricing leaders included broker-document ingestion, automated triage, helping teams build or document models, and removing manual data-entry work and double keying.

“It’s not just about efficiency and driving down operating costs. It’s also about augmentation and optimisation,” said Mayo. “We’ve already got use cases in Allianz helping underwriters make decisions quicker and with more accuracy.”

For C-Quence’s Gorton, one of the most immediate benefits is reducing low-value administrative work. “It’s about freeing up your staff to focus on analytics and pricing – not sit there cleaning data manually in an Excel sheet,” he said.

Pricing at pace, but with purpose

The roundtable discussion highlighted the changing role of pricing, outlining a function that is becoming faster, more connected and more influential across the insurance business. Technology and data are enabling insurers to respond quickly to changing market conditions while proactively identifying new opportunities.

But speed alone is not the objective. “Just because you can make daily rate changes doesn’t mean you should,” cautioned Gorton. “You’ve got to make sure that you’re not overcorrecting.”

“There’s a balance to be struck,” agreed Mayo. “That’s where good governance structures and post-implementation reviews are increasingly important. It’s not just about pulling the lever; it’s also about recognising and understanding the impact.”

For pricing teams, the challenge is therefore to combine greater speed and flexibility with the judgement to know when and where to act. As pricing becomes more deeply embedded in business decision-making, its real value arguably lies in helping organisations make better-informed decisions, with greater confidence.


Explore further insights from the Insurance Post/Optalitix research:

• Report 1: Pricing transformation in insurance
• Report 2: The underwriter perspective
• Report 3: Pricing transformation in MGAs
   

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