Essential Tips for Actuaries: Effective Monitoring of New Insurance Products Post-Launch
Launching a new insurance product is just the beginning of a complex journey in the insurance industry. The post-launch phase is crucial as it provides essential real-world performance data that can reveal both opportunities and risks for actuaries. In this article, we explore the critical considerations actuaries should keep in mind during this pivotal stage, as outlined by Edwin Graham, a principal actuarial data scientist at Akur8.
The Importance of Conversion Rates
Conversion rates serve as a vital early metric for evaluating the success of a new insurance product. While an increase in conversion rates might initially seem encouraging, it could signal potential pricing problems, such as undercutting in specific segments. To ensure accurate assessments, actuaries should employ credibility-based methods like Lasso Credibility to determine if observed changes are warranted.
Understanding Claims Data
Claims data is another critical component, but it comes with its own set of challenges. Early claims may not accurately represent the overall risk profile. Instead of making impulsive decisions based on initial data, actuaries should identify consistent patterns and gradually integrate these insights into their pricing models.
Experimentation: A Key Strategy
Where regulations allow, A/B testing different pricing strategies or marketing approaches can uncover valuable insights that traditional models might overlook. Tools such as Akur8’s DEMAND and DEPLOY modules simplify this process, enabling actuaries to test assumptions without disrupting broader portfolios.
Collaboration Across Teams
Actuaries should also prioritize collaboration with various teams, including underwriting, claims, marketing, and product development. Understanding the full scope of operations is essential, as a drop in conversion rates may be due to user experience (UX) issues rather than pricing problems.
Transitioning to Experience-Based Models
As the volume of data increases, insurers can shift towards experience-based models. Tools like Akur8’s RISK and RATE modules facilitate this transition, allowing for robust simulation and assumption testing.
For more insights on navigating the post-launch phase of insurance products, read the full blog on Akur8’s website here.
