INSURANCE PRICING ROOM

INSURANCE PRICING OPTIMIZATION WITH AN API

OUR UNIQUE VALUE PROPOSITION

Data XL allows companies to set-up the best price.  

Price will be no longer based on cost, but on customers' perceived value or on market rules. 


This premium price either reduces customer churn, optimizes customer price preferences (~market share), maximizes the margin and much more. 


We use behaviour data and experimental design to predict value, not to reduce cost.

KEY BENEFITS

  • No need for a full crawl of every risk factor combination in the market. We use experimental design techniques to capture the market’s price engines. This feature is quite relevant for the agent and broker channel.
  • No setup cost.
  • Fast results.
  • No IT layer.
  • We do not sell software and a manual.
  • The strategy will always remain with the insurer.


MAGIC METRIC

  1. MARKET PRICING: Reverse engineer competitor pricing with R2>95% accuracy.


  2. VALUE BASED PRICING: Increase renewal pricing by ~4% (on average) without any market share loss.

WHY IS DATA XL DIFFERENT

With experimental design we can capture the competitor price

Data XL has developed an algorithm with an experimental design that can capture competitor pricing, enabling Data XL clients to offer MARKET-BASED PRICING. Note that:


  • Data XL does not need thousands of quotations to capture the price models.
  • Data XL obtains data/local information and combines it with API access for a full solution.
  • The market data provided is not easily obtainable and therefore is not available to brokers/Data XL competitors.

Predict the Willigness to Pay with experimental design

Data XL uses a GLM model to predict the willingness to pay (VALUE-BASED PRICING) with a ‘secret sauce’. Customer willingness to pay is measured using the same risk factors that all insurers use and the market price (a plus). 


Data XL's ‘secret sauce’ is the sample data: Big data or observational data cannot accurately measure true willingness to pay. The experimental design yields causality (true willingness to pay). This experimental data collected via backtesting and live experiments.

We use all the information available. Not just the convenience/internal data

Data XL uses all the data mentioned to optimise the price (margin, share or retention). Data XL’s unique approach bears in mind competitor pricing and the customer’s individual characteristics (the same basis as the risk approach). Therefore, it is more comprehensive and precise than its competitors.


SOLUTION DESCRIPTION

Data XL platform has the following modules:

Cost base pricing /actuarial pricing:  

  • Measures the prospective cost of a claim and helps insurance companies to redefine their cost structures. Data XL still prefers that the client provides this data as an input, using their own knowledge and expertise.


Market Pricing: 

  •  An algorithm with an experimental design that can accurately capture competitor pricing.

Value Based Pricing: 

  • A GLM model with proprietary elements that predicts customers’ willingness to pay.



Optimal Pricing: 

  • Uses mathematical techniques to design the best price, one that reduces churn, enables a better margin and maximises the share of preferences.



*

Our mathematical algorithm is more comprehensive than others on the market. In fact we are the only ones that combine risk cost, competitors' view and willingness to pay.


Futhermore, while our competitors opt to sell a software platform not a solution, they do not isolate the price from other marketing mix elements. Therefore, their solution is based only on (lowering) the price.



CHECK OUT our Platform presentation video

Check out this great video that we used on F10 DEMO DAY in Zurich