If you believe that insurance pricing == modelling, you are mistaken.
When I began my journey as an actuary a decade ago, modelling and coding fascinated me the most. Today, I've encountered some of us who seem to overemphasize the importance of precise modelling in insurance pricing.
While there's nothing wrong with enhancing risk/demand/other model metrics, it appears that there are several other priorities that deserve greater attention:
- Deployment: No matter how cool your pricing model or external data provider is, if you cannot integrate it into sales channels, it becomes useless.
- Explainability: The internal sense of the "right price" and recent regulations, such as Customer Duty in the UK, highlight the importance of being prepared to explain premium increases/decreases to policyholders.
- Time-to-market: Consider how quickly you can recognize loss ratio deterioration in a specific segment, how fast you can update the pricing pipeline, and whether the response time of your rating engine is short enough.
- Pricing strategy and team: The people aligned with the insurer's strategy are the most crucial factor in the pricing team you work with. Additionally, the way you collaborate, communicate, and utilize your skills is crucial.
This list is likely not exhaustive. If you can help me extend it, please leave your comment.