MPI teams up with WTW to propel pricing strategy
MPI teams up with WTW to propel pricing strategy | Insurance Business Canada
Insurance News
MPI teams up with WTW to propel pricing strategy
Solutions will address “very specific needs”
Insurance News
By
Mika Pangilinan
Manitoba Public Insurance (MPI) has tapped WTW’s products to aid in its pricing strategy. The Radar and Emblem solutions will provide the Crown corporation with functionalities that will address goals related to its pricing strategy, a press release by WTW said.
Radar is part of WTW’s Radar Suite of software solutions. Its capabilities include machine-learning predictive analytical platform, rate deployment speed and efficiency, and calculation flexibility. These features streamline complex legacy software and hardware management challenges.
On the other hand, Emblem is designed to help insurers improve profitability through a targeted and efficient pricing model.
WTW senior director Nicolas Beaudoin said they were approached by MPI for a solution that would enable generalized linear modeling (GLM) for rate-making.
“They wanted a platform that could determine trends for claims frequency and severity, along with inflation, within an architecture that included formalized security and confidentiality,” he said.
“They were also seeking training and actuarial consulting services to assist with applying GLM to MPI’s rate-making methodology to ensure that the created models were suited to MPI’s business needs.”
MPI vice president, chief actuary, and chief risk officer Cara Low said Crown corporation was looking for solutions that addressed “very specific needs.”
“For example, the ideal vendor had to provide support and documentation for configuring the software, including integration with other data sources; they also needed the capability of managing multiple versions of the model, with the ability to compare multiple versions of the model for the same underlying data,” said Low.
“The ideal partner also needed to deliver a platform that could apply caps and floors to rating variables, analyze for varied rate dislocation, handle the extension of exposure methods to determine current rates or premium trends, and provide the ability to calculate all rating factors simultaneously to determine the indicated rate relativities.”
According to Low, WTW was “the right partner” to deliver these solutions since its team “understood how product changes impact different lines of business.”
WTW’s Beaudoin added that the functionality around GLMs and the associated analytics capabilities were they key characteristics that pushed MPI to select WTW.
“They really appreciated the fact that Radar was user-friendly,” said Beaudoin. “MPI’s chief actuary had already worked with Emblem and was impressed with the functionality, which drove her to learn about Radar as well.”
“MPI ultimately agreed to an Emblem/Radar package because it would provide them with broader functionality. We also partnered on the technology side to help MPI with software support, around a comprehensive solution to address all of their needs. It wasn’t just GLM, but also the analytics and reporting that Radar can provide. We were quite optimistic that they could achieve their aggressive business goals with WTW’s technology-driven software platforms.”
In late July, MPI said its overall net income for 2022-23 landed at $4.2 million. Claims costs also surged to $1.2 billion on the back of inflation, rising labour rates, supply chain issues, and the higher prices of used vehicles.
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