Pricing groups have by no means had extra inner knowledge. But many nonetheless wrestle to reply a easy query: Are we pricing danger intentionally or drifting out of alignment with the market with out realising it?
We sat down with our Lead Knowledge Scientist, Kalle Myllarniemi, to speak about how our new machine studying capabilities, Apollo and Atlas, got here to life and what they now make attainable.
Q: The place did the thought behind Apollo and Atlas originate?
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The start line was scale.
Over the previous few years, we reached some extent the place we’re accumulating 600,000 costs per day throughout a number of sectors. That quantity of information basically modifications what is feasible. Once you mix that with the rising variety of manufacturers available in the market and the rising range of pricing methods, it turns into clear that conventional benchmarking solely tells a part of the story.
Competitors is extra advanced than it was 5 or ten years in the past. There are extra underwriting appetites, extra segmentation methods and extra nuanced score interactions. Pricing has grow to be extra multidimensional.
Apollo and Atlas had been born from that intersection of unprecedented knowledge scale and rising strategic range available in the market. We realised we weren’t simply observing costs. We had been observing behaviours. When you can mannequin behaviour, you may perceive technique.
That was the shift.
Q: What downside had been you seeing available in the market that made this essential?
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Pricing groups are exceptionally educated about their very own books. They perceive their score 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 aren’t at the moment writing.
That creates a structural blind spot.
If you’re not writing a specific danger kind, you wouldn’t have claims knowledge for it. With out claims knowledge, it turns into troublesome to confidently value into that house. That is one motive insurers can hesitate to develop urge for food. The uncertainty feels commercially dangerous.
On the identical time, adversarial choice stays a relentless risk. In case your pricing doesn’t precisely mirror how the broader market is segmenting danger, you may find yourself getting chosen towards and attracting dangers that others have intentionally priced away from.
Apollo addresses each points.
It permits insurers to know how the broader market costs dangers that sit exterior their present footprint. It additionally reveals the variety of pricing methods in play. Many pricing professionals know their very own mannequin inside out, however Apollo exhibits how weighting buildings, 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 may 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 sometimes humbling.
Once you first begin analysing Apollo outputs, they will problem assumptions. You may see an insurer displaying considerably much less weighting for licence tenure than the broader market, which initially feels counterintuitive.
However while you interrogate function interactions and clustering, the story begins to emerge. Maybe that insurer is inserting a lot stronger emphasis on claims free driving expertise as an alternative. What appears to be like 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 turned 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 offers aggregated market fashions, a view of how the market costs danger general.
Extra importantly, it exhibits how your pricing construction aligns with or diverges from the principle 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 score components that others seem like utilizing closely however you aren’t, and equally, components the place you’re distinctive. That may set off useful inner dialogue. Is that this deliberate differentiation or an unintentional hole?
Third, it introduces a market lens on score issue interactions. Pricing doesn’t function in isolation. Components work together. Apollo helps groups perceive how these interactions evaluate with broader market patterns.
Lastly, it offers 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 look at a earlier than and after place relative to market behaviour. That reduces uncertainty and permits for extra assured implementation of change.
It strikes exterior knowledge from descriptive benchmarking to actionable simulation.
Q: Let’s discuss business worth. What modifications in sensible phrases?
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In sensible phrases, it improves danger choice and pricing accuracy.
With Atlas, insurers acquire extra granular categorisation of danger, significantly in areas like postcode segmentation. That results in extra correct pricing of location primarily based danger and might instantly enhance loss ratios.
Apollo enhances this by guaranteeing score buildings are aligned with observable market behaviour, decreasing the danger of adversarial choice.
The mixed impact is sharper aggressive positioning and higher technical efficiency.
It isn’t about copying the market. It’s about understanding it nicely sufficient to decide on your place intentionally.
That’s the place the business worth sits.
The Greater Image
Machine studying in insurance coverage usually focuses on inner optimisation.
Our strategy focuses on market intelligence.
As a result of sustainable pricing efficiency is not only about constructing higher fashions. It’s about understanding how your pricing logic sits inside a stay, aggressive market.
Discover the small print behind Apollo and Atlas
Obtain the total info packs to see how market-grounded machine studying can strengthen your pricing technique.
