2 Testing imports Rajesh Narayan, VP of Product & Underwriting, ValueMomentum

When you think about pricing changes, you have to have the actuaries allow pricing to happen in a modeling environment first. And that modeling environment typically is something which they have learned over a period, and doesn’t naturally come to a new actuary because it may not be in R or Python, it’s in some other language.

And once they finish their pricing modeling, they are now turning it over to an IT group, which has to then implement it into a rating system, or it’s on a spreadsheet which the underwriters are using.

And oftentimes these are fragmented, and that’s how rating and pricing are managed. That means that your business outcomes are more difficult to manage, because if you want to get speed to market profitability, simulating against a book of business — all of those are difficult because they’re fragmented.

Also, bringing somebody in and learning the ropes is more difficult because you teach them a new language on the modeling side.

What needs to change really is bringing pricing as a disciplinary function, and the necessary part of deploying it — rates into the market through the filing process — in a single, seamless way, which allows you to bring efficiencies in the process and result in the speed to market that you actually want, while being able to simulate your profitability and your book of business characteristics and your book of business at any given point of time, as you need it.

And that really allows you to bring in more variables into the mix and allows better pricing to be manifested.