hx Renew for SME: 5 reasons to take back control of your rates and rules

Effective pricing is one of the most powerful levers for insurers in the small-to-medium enterprise (SME) space. However, the complexity of distribution channels—ranging from comparison sites and direct brokers to software houses—has created a need for a centralized approach to executing rates and underwriting rules. This is typically done via a third party hosted infrastructure or an internal PAS that’s connected to these different distribution channels.

Great! Your rates are set and your underwriting rules are helping you to write more business automatically, saving your underwriters from reviewing straightforward policies, and ensuring you’re getting quotes back to brokers rapidly.

While this works in theory, the reality for many insurers is very different. Updating rates and rules requires significant time, effort and cost, with insurers often left holding the bag in the face of sudden market fluctuations.

With the risk landscape changing faster than ever before, insurers writing SME business need to be able to price dynamically. Enter hx Renew.

Read on to learn how taking back control of your rates and rules with hx Renew could transform your pricing.

1. Update rates efficiently in line with the latest analysis and strategy

For high-volume markets like SME, pricing agility is critical. Insurers operate in an increasingly volatile risk landscape, with climate change impacting frequency of extreme weather and flooding, creeping inflation, and shifting customer demand all creating new pockets of unprofitability.

If your rates and rules are not aligned to your underwriting strategy, and your ability to update those rates and rules is limited, you risk writing large swathes of unprofitable business as part of your “flow” underwriting process when the market does shift beneath you.

This has an obvious impact on your profitability, particularly if there is a significant shift and it takes weeks to update your rates and rules. That’s why it’s so concerning that, according to our State of Pricing survey, 41% of pricing actuaries say making changes to applications and processes takes far too long.

With hx Renew, actuaries are enabled to create, deploy and refine pricing models quickly and securely, in a web-based modular Python environment. They can make model changes at an Excel-like pace, keeping your rates in lock-step with your strategy.

2. Enable scenario analysis to inform rate changes

Fast rate updates are critical, but knowing what and when to change is just as important. Scenario analysis allows you to test new rate structures and predict their impact, giving you the insights needed to act decisively.

With current solutions, actuaries are limited in their ability to extract and analyse pricing data to determine the best rates and rules to set. Many software houses and externally hosted solutions don’t support easy ways to extract data, or to run existing portfolios against new potential rate structures for “what-if” analysis.

hx Renew changes that. Flexible scenario and impact analysis tools enable actuaries to understand the potential risks and opportunities in their portfolios by assessing the marginal impact from model updates and assumption changes.

3. Respond more effectively to referrals

To meet the pace of the market, SME insurers need to minimise the number of referrals. This ensures straightforward quotes are delivered quickly, and your underwriters only spend time reviewing referrals that require their expertise.

When underwriters do receive referrals, they need a user friendly interface that streamlines the process. But building a separate user interface can be a lengthy process, and ensuring the underwriter is seeing all the information they want and need at the point of referral (including 3rd party data enrichment) can be challenging or impossible.

With hx Renew, you have the option to use our underwriter UI that’s deeply integrated with your pricing tools so you can easily surface all relevant data at the point of pricing.

4. Empower actuaries to self serve changes

By utilising software houses to execute rate changes across distribution channels, insurers are often reliant on IT teams and vendors to execute changes.

Changes can be costly and time-consuming, which severely limits the scope for rapid updates in the wake of market changes and reduces their overall ability to remain competitive. It also creates a huge overhead for IT teams.

Given much of that business is written as part of “flow” underwriting, insurers are at risk of writing huge volumes of unprofitable business if they cannot adjust their rates and rules rapidly enough in response to market changes.

In an ideal world, actuaries would be in full control of their rate setting, and have the ability to extract their first-party pricing data, both for holistic reporting and for actuarial analysis such as portfolio optimisation.

hx Renew eliminates the “third party” bottleneck. Actuaries take full ownership of building, deploying, rate-setting and implementing independently. Meanwhile, IT can retain control with built-in governance and security frameworks, ensuring compliance without sacrificing agility.

5. Future proofing

Lack of agility and ownership over rates and rules creates significant challenges for actuaries, underwriters and IT teams today.

But the lack of proper infrastructure will limit future use cases too. When taking rates and rules to new markets and new distribution channels, insurers will find the same challenges magnified and multiplied. Support for new distribution channels will be difficult to incorporate, and innovative machine learning use cases will be challenging at best, impossible at worst.

Ensuring future profitability requires flexible, scalable infrastructure that empowers your team to ingest, analyse and execute changes without the traditional overheads we see today.

hx Renew is deeply flexible, allowing insurers to create the bespoke models and infrastructure they need to stay competitive. Because it’s based in Python and helps you create a data asset of your pricing and underwriting decisions, it’s also the ideal platform for developing AI applications.

What other features and opportunities could you unlock?

Beyond taking back control of your rates and rules, hx Renew can:

• Allow your actuarial teams to leverage rich data and build out best-in-class pricing models with Python

• Enable your underwriters with optimized workflows and data driven decision-making

• Create strong, flexible, streamlined infrastructure for IT

Get in touch to explore how we could transform your SME pricing.