Pricing Analytics |
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Insurers worldwide can potentially analyze their data in a meaningful way to support educated pricing decisions. Pricing analytics helps companies better understand how each pricing decision affects the company’s bottom line. Without this understanding, companies find themselves operating in the dark, while valuable profit dollars leak out of sales transactions and missed opportunities. When it comes to pricing decisions, companies tend to price products based on experience-based intuition, which results in large amounts of unrealized profits.
Fractal’s pricing analytics solutions provide insurers the visibility into profit leaks due to unnecessary discounting and missed sales opportunities when prices are suboptimal. We study data available in an insurer’s data warehouses, CRM and ERP and develop solutions that constantly monitor sales, inventory, cost, and market data to alert managers when market conditions have changed, and pricing actions are necessary.
We help insurers optimize their pricing strategy through the use of more granular pricing models - by identifying additional characteristics that can segment existing rating cells into smaller cells with different rates. We thus provide the insurer with a more granular structure that can compete with other insurers using lower prices, while continuing to charge an appropriate premium. At the same time, they may charge more for other sub-segments that have been identified as having a higher loss cost. This results in a competitor retaining business that is under-priced and loosing profitable business. We also help insurers anticipate the outcomes of specific price moves by conducting price elasticity studies and performing a discount analysis, so they can make decisions that support the company’s revenue and profit objectives.
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