Transcript PowerPoint Sunusu

Profitability Challange in Casco –
Putting Demand into Work
İstanbul, 07.04.2014
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Agenda
 What we are facing …
The big picture - A look at the market
 What we do and how we do them …
Current applications of the companies
 What we should do …
More on marketing
 What the challanges are …
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The Big Picture…
18 mio vehicles
Agencies
13,3
4,7
mio
mio
Banks
Aggregators
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37
non-life
insurance
companie
s
What we do
We (non-life companies) are…
 Selling almost the same «packaged» product
 Having nearly the same «after sales» service quality
 Focusing on the same «customer portfolio»
 Competing on only «prices»
After all what we expect to see at the bottom line
are…
 Growth
 Profit
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Cost Based Modelling
How we do the pricing
Margin
Op. Cost
Adjust rates
according to
the market
(usually
downwards)
Pure
Premium
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#2
#1
#3
#4
Competitors
What we should do
 Try to attract the remaining 13,3 mio.
 Discover their utility functions.
 What risks they think that they face.
 Increase awareness.
 How much they are willing to pay to avoid
those risks.
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What we should do
 Try to optimise income for the 4,7 mio.
 Discover elasticity of the demand per
customer.
 Optimise the probability of renewal or
accepting the proposal.
 Discover the efficient frontier for the
portfolio.
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What we should do
Insurance
Company’s
View
?
?
?
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Customer
View
= u ( x1; x2; …)
Customer behaves
according to her/his
utility function.
What we should do
Cost-Based
Modelling
• Univariate & Multivariate
Analyses
• Frequency & Severity Models
Competitive
Pricing
• Deeper benchmarking
• Forecasting the competitors’
tariffs
Behavioral
Pricing
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• Demand forecasting
• Renewal analysis
• New business analysis
How we should do
Behavioral
Pricing
Goal
Discovering competitors’
pricing
Forecasting customers’
choices
Measuring the elasticity
for demand
How?
Reverse engineering the
competitors’ tariffs
Construct demand models –
train&test
Measuring the effect of
pricing decisions
Employ «what-if» scenarios
Growth/Profit
Optimization
Using optimization algorithms
for goal management
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What we should do
Profit
Attainable profit level
for the same GWP level
B
C
A
D
Attainable GWP level for
the same profit level
Efficient frontier
GWP
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Challanges & critical points
 Objective setting.
 Choosing the right mix – technical & commercial.
 Organizational engagement between marketing and
actuarial functions.
 Legal framework for capturing the competition data.
 System requirements and speed to market.
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Thank you very much …
Copyright © 2014, Anadolu Sigorta. Tüm hakları saklıdır.