Dynamic pricing for property insurance

Our client, a direct insurer in the P&C sector, had achieved an unsatisfactory overall profitability in the corporate business. The search for new solutions focused on how to actively influence sales management and the renewal of existing customers.

Implementation

ZENAI's machine learning experts implemented a sales management system with dynamic pricing for new and existing customers. This enables prompt reactions to market changes, personalised offers and fair prices. The approach is founded on a precise forecast of demand and a realistic prediction of the production costs of the insurance policy. On this basis and in combination with machine learning methods, the demand behaviour for different price and market scenarios is modelled, simulated and optimised. Furthermore, the algorithm constantly updates the coefficients used for the calculation and learns according to the success rate of its own forecasts and proposals.

Result

The result is an optimal portfolio mix for the insurer in terms of portfolio size and profitability. This is achieved through intelligent management of existing clients and new business. In contrast to traditional pricing, both are managed according to the current market situation and production costs.

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