One thing that almost everyone in the world of insurance agrees on is that pricing risks have become much more difficult after Covid, and the recent acceleration in the rate of inflation and that price volatility has come just as the industry embraces AI and automated pricing, and placing of risk.
There are some challenges ahead, but there are also opportunities. IE spoke to Adrian Coupland, the new Head of Sales and Business Development for EMEA at Earnix, to find out more.
IE; Tell us why you’ve joined Earnix this year.
AC; Earnix is a really exciting company, with great products, a great reputation and are on a mission to grow and that is really exciting.
The pandemic speeded up so much digital activity within insurance over the last couple of years, but if you look around there are what, say 6000 different insurance brands just in the USA, so there’s still scope for consolidation, especially in the use of systems.
IE; We have seen consolidation in the UK broker sector in the last couple of years, how much more is there to come generally?
AC; Consolidation is not over, and there continues to plenty of activity in the market. The insurance market and models influencing it will continue to evolve.
IE; Where do you see future opportunities in the broker sector?
AC; Brokers hold a key role in the commercial and personal lines market. The commercial lines and personal lines market are quite different in terms of overall trading dynamics. What is clear is that consumer expectations both in terms of pricing and service has been increased over the past couple of years, consumers want to search, buy and service their insurance needs when it suits them and they don’t want to constrained by office hours. For auto rated business, delivering competitive product, underpinned by good service is expected, both pricing and service are important. Commercial lines and more complex risks all lend themselves very well to the broker market – as consumers want and need access to expert knowledge.
IE: Embedded insurance is a buzzword right now, what’s the Earnix take on that?
AC: Embedded Insurance is an exciting space in the market, Just look at what Tesla are doing on embedded car insurance in some states in the US, the amount of data being created to be used in pricing is really exciting and will challenge legacy approaches. If you look at subscription ownership as another route to an embedded offering – on the surface, it looks simple right? Subscription is more aligned to renting than owning a car though, so risk profiles changes for different reasons – less simple..
At Earnix we support insurers, brokers, MGAs with their rating and pricing needs, we provide real time pricing capability for a number of major UK brands, whether direct to consumer, via aggregators or whatever channel is needed – from traditional models to UBI.
IE: We spotted the phrase composable solutions on your website and just wondering, what does that mean?
AC; Good question! Composable really means that Earnix can support rating and pricing needs anywhere in the insurance chain. Insurers and brokers do not need to rip and replace all their technology to implement a best of breed pricing and rating solution. Composable just means we can overlay our software into your existing technology.
IE: We are entering a time of inflation in many markets, is the big challenge over the next few years going to be accurate pricing?
AC: It’s going to be a big issue for sure, there’s no doubt that price rises will affect everyone in the insurance chain and you have to reflect that at the point of quote. If you look at Motor then you can see that at some time in the near future there will be a price correction.
What we do at Earnix is look at historic price movements and then find the real value in the future, from an insurer’s perspective. People within a company can use our software to collaborate on real time product updates and development. That’s important, because you need to test every aspect of your product before launch.
It also gives you the power to update and evolve existing products as the market changes. Could be compliance or regulatory changes, or a change in lifestyles like working from home. Whatever changes the risk, should automatically change the pricing.
IE: Interesting stuff, thank you.