Pricing groups have by no means had extra inner information. But many nonetheless wrestle to reply a easy query: Are we pricing threat intentionally or drifting out of alignment with the market with out realising it?
We sat down with our Lead Information Scientist, Kalle Myllarniemi, to speak about how our new machine studying capabilities, Apollo and Atlas, got here to life and what they now make doable.
Q: The place did the concept behind Apollo and Atlas originate?
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The start line was scale.
Over the previous couple of years, we reached a degree the place we’re gathering 600,000 costs per day throughout a number of sectors. That quantity of knowledge basically adjustments what is feasible. While you mix that with the rising variety of manufacturers available in the market and the rising variety of pricing methods, it turns into clear that conventional benchmarking solely tells a part of the story.
Competitors is extra complicated than it was 5 or ten years in the past. There are extra underwriting appetites, extra segmentation methods and extra nuanced ranking interactions. Pricing has develop into extra multidimensional.
Apollo and Atlas have been born from that intersection of unprecedented information scale and rising strategic variety available in the market. We realised we weren’t simply observing costs. We have been observing behaviours. In case you can mannequin behaviour, you’ll be able to perceive technique.
That was the shift.
Q: What downside have been you seeing available in the market that made this crucial?
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Pricing groups are exceptionally educated about their very own books. They perceive their ranking construction, their claims efficiency and their underwriting urge for food in depth.
However they usually have restricted visibility into how others are pricing, significantly in segments they don’t seem to be presently writing.
That creates a structural blind spot.
In case you are not writing a selected threat kind, you do not need claims information for it. With out claims information, it turns into tough to confidently worth into that house. That is one motive insurers can hesitate to broaden urge for food. The uncertainty feels commercially dangerous.
On the identical time, adversarial choice stays a continuing menace. In case your pricing doesn’t precisely mirror how the broader market is segmenting threat, you’ll be able to find yourself getting chosen in opposition to and attracting dangers that others have intentionally priced away from.
Apollo addresses each points.
It permits insurers to grasp how the broader market costs dangers that sit exterior their present footprint. It additionally reveals the range of pricing methods in play. Many pricing professionals know their very own mannequin inside out, however Apollo reveals how weighting constructions, function interactions and segmentation approaches differ throughout the market.
It strikes the dialog from “the place are we priced?” to “how are we positioned?”
That could be a basically completely different degree of perception.
Q: How did it really feel seeing these propositions go from idea to actuality?
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Genuinely thrilling and infrequently humbling.
While you first begin analysing Apollo outputs, they will problem assumptions. You would possibly see an insurer displaying considerably much less weighting for licence tenure than the broader market, which initially feels counterintuitive.
However whenever you interrogate function interactions and clustering, the story begins to emerge. Maybe that insurer is putting a lot stronger emphasis on claims free driving expertise as a substitute. What seems like underweighting in isolation turns into a deliberate strategic commerce off.
That’s when it turns into highly effective.
Apollo doesn’t simply floor variations. It helps clarify them. You begin to see the narrative of various pricing methods take form. Sure insurers lean into expertise indicators, others into tenure, others into postcode granularity or behavioural proxies.
Seeing these patterns crystallise was the second it grew to become clear this was greater than a modelling train. It was strategic intelligence.
Q: What does Apollo really change for pricing groups?
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A number of issues.
First, it gives aggregated market fashions, a view of how the market costs threat total.
Extra importantly, it reveals how your pricing construction aligns with or diverges from the primary pricing methods working available in the market. You’ll be able to see which strategic cluster you most bear a resemblance to.
Second, Apollo highlights ranking elements that others seem like utilizing closely however you aren’t, and equally, elements the place you might be distinctive. That may set off useful inner dialogue. Is that this deliberate differentiation or an unintentional hole?
Third, it introduces a market lens on ranking issue interactions. Pricing doesn’t function in isolation. Components work together. Apollo helps groups perceive how these interactions examine with broader market patterns.
Lastly, it gives a take a look at mattress.
If the evaluation highlights a possible alternative, for instance adjusting weightings in a particular section, insurers can mannequin the affect and think about a earlier than and after place relative to market behaviour. That reduces uncertainty and permits for extra assured implementation of change.
It strikes exterior information from descriptive benchmarking to actionable simulation.
Q: Let’s discuss business worth. What adjustments in sensible phrases?
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In sensible phrases, it improves threat choice and pricing accuracy.
With Atlas, insurers achieve extra granular categorisation of threat, significantly in areas like postcode segmentation. That results in extra correct pricing of location primarily based threat and might straight enhance loss ratios.
Apollo enhances this by making certain ranking constructions are aligned with observable market behaviour, lowering the chance of adversarial choice.
The mixed impact is sharper aggressive positioning and higher technical efficiency.
It’s not about copying the market. It’s about understanding it properly sufficient to decide on your place intentionally.
That’s the place the business worth sits.
The Larger Image
Machine studying in insurance coverage usually focuses on inner optimisation.
Our strategy focuses on market intelligence.
As a result of sustainable pricing efficiency isn’t just about constructing higher fashions. It’s about understanding how your pricing logic sits inside a dwell, aggressive market.
Discover the small print behind Apollo and Atlas
Obtain the total data packs to see how market-grounded machine studying can strengthen your pricing technique.
