CompetitiveAnalysisPracticesinPersonalLinesInsurance‐NorthAmerica

2015SurveyResultsPublishedby

© Earnix 2015  2

  

ExecutiveSummary

Asinsurancemarketsbecomemoresaturated,competitiveintelligencehasgrownintoakeyfunctionforeveryinsurer.Atthesametime,howinsurerstrackandanalyzetheircompetitorsis still an evolving practice – with best practices being formed and adapted to meet thechallengesof ever‐changingmarket dynamics and the opportunitiespresentedby emergingdatasourcesandinnovativetechnologies.ThissurveywasconductedbyEarnixwiththegoalofhelpinginsuranceexecutivesandpricingprofessionalsunderstandhowcompaniesacrosstheindustryanalyzecompetitiveinformationand how this information is being used. Survey responses were collected online from 60executivesandpricingprofessionalsrepresentinginsurancecarriersfromtheUnitedStatesandCanada.Thisreportincludesareviewofthesurveyfindings,accompaniedbyanEarnixexpertanalysisoftheresults,basedonourworkwithleadinginsurersinNorthAmerica.Keyfindingsfromthesurveyinclude:

Closetohalfofthecompaniessurveyed(42%)haveadedicatedcompetitiveanalysisteam;thelargerthecompanyis,themorelikelyitistohaveadedicatedteam. 

Regardless of company size, the effectiveness of competitive analysis efforts isperceivedtobehigherwhencompanieshaveadedicatedcompetitiveanalysisteam.  

Comparativeratingvendorsarenowtheprimarysourceforobtainingcompetitors’premiumdata,usedby87%ofthecompaniessurveyed.  

Companiesfindtheircompetitorrateanalysishighlyuseful.Theprimaryusesofcompetitorrateanalysisaregaugingthecompany’scompetitivemarketpositionandguidingfactorselection.  

Asignificantnumberofcompanies(43%)saycompetitiveanalysishasbecomemoreimportantasaresultoftheincreaseininsuranceshoppingsites. 

Almosthalfoftherespondents(47%)plantoincreasetheinvestmentincompetitiveanalysisoverthenexttwelvemonths. 

 Ihopeyoufindtheseresultsinformativeandwouldwelcomeanyquestionsorcommentsonthefindings.Sincerely,

MerylGoldenGeneralManagerNorthAmerica,Earnix

© Earnix 2015  3

  

TableofContents

ExecutiveSummary ................................................................................................................... 2

CompetitiveAnalysisTeam ........................................................................................................ 5

CompetitiveAnalysisTeam ........................................................................................................ 6

WhichCompetitorsAreAnalyzed? ............................................................................................. 7

TypesandUsesofCompetitiveAnalysis ..................................................................................... 8

SourcesofInformationUsedforCompetitiveAnalysis ................................................................ 9

EffectivenessofCompetitiveAnalysisEfforts ........................................................................... 10

InvestmentandImprovementsinCompetitiveAnalysis ........................................................... 11

ObtainingCompetitorPremiums .............................................................................................. 13

AssigningCreditScores ............................................................................................................ 14

ConfidenceinEstimatingCompetitors’CreditScores ................................................................ 15

AssigningTelematicsDiscounts ............................................................................................... 16

UseofCompetitorRateAnalysis,FrequencyofUpdates ............................................................ 17

ImpactofInsuranceShoppingSites .......................................................................................... 18

ConfidenceintheAccuracyofCompetitorRates ....................................................................... 19

HowtoMakeCompetitorRateAnalysisMoreEffective? ........................................................... 20

RespondentDemographics:CompanyLinesandSize ................................................................ 21

RespondentDemographics:RoleintheCompany ..................................................................... 22

TableofFigures ....................................................................................................................... 23

 

 

   

© Earnix 2015  4

  

CompetitiveAnalysisPractices 

ThereisnodoubtthatthecompetitivelandscapeintheNorthAmericanpersonallinesinsurancemarket ischanging.Themarket is themostcompetitive ithaseverbeen,andgrowingmarketshareseemstobeatoppriorityformanycarriers.Thistrendhasresultedinthewillingnessofmanycompaniestopricepoliciesaggressivelytoattractandretainmorebusiness.Analyzingthecompetitioniscriticalinunderstandingtheeverchangingmarket.Withtheproliferationofdigitalchannels, mobile internet and aggressive advertising we are seeing an acceleration of moreaggressiveandcomplexratechanges.

Adecadeago,mostcompaniesfollowedapredictablepatternfortheirratechanges.Traditionally,companieswouldupdatesomeoftheirfactorsannually(driverclass,deductibles,etc.);everyfewyears,theymightintroduceanewratingelementsuchasanewdiscount.Nowadays,companiesarecontinuouslyrollingoutnewprograms,withvastlyincreasedcomplexity.Overthepastfewyears,wehaveseen the roleof thecompetitiveanalyst change fromclericalwork tocomplexstrategic analysis. Today, almost half of insurance carriers have dedicated competitiveintelligenceteams.

Theprimaryresponsibilityforthesededicatedcompetitiveintelunitsistocollect,analyze,andcommunicatecompetitoractivity.Justlikeinthepast,themainsourceofcompetitiveinformation(79%ofcompanies)iscompetitorratefilings.However,thecomplexityofmanycompanies’ratingstructureshasincreasedinrecentyears,makingdecipheringtheratesextremelychallenging;itisnotuncommonforfilingstobethousandsofpageslong.

Thislevelofcomplexityissignificantlyslowingdowntheanalyticsprocess.Forexample,yearsagowhenananalystwasasked“whatarethemulti‐policydiscountsforourtopfivecompetitors?”findingtheanswerwasamatterofscrollingthroughafewratemanualsandfindingthepublisheddiscountinthemulti‐policydiscounttable.Now,whatusedtobeasinglenumberisinmanycasesa multivariate table that requires a significant effort to analyze. Work that previously tookminutesisnowtakinghours.

Tokeepupwiththeincreaseinratingsophistication,overhalfofcompaniesforeseeinvestingmoreincompetitiveintelligenceoverthenextyears.Thisisaprofoundstatementconsideringthehighpressurethatmanycompaniesare feelingwithregardtotheirexpenseratio.Whilemostcompanies are trying to reduce expenses, many still see the need to stay current with theconstantlychangingmarket.Surveyrespondentshaveidentifiedaneedforbetteranalysistoolsandbetterdatacollectionasthetoptwoimprovementsformoreeffectivecompetitiveanalysis.Presumablythisiswherecompanieswillbeinvesting.

Overthenext fewyears,wecanexpectthecomplexityofratingplanstocontinuetheupwardtrend,thusfurtherincreasingtheneedtostaycurrentonmarketprices.Competitiveintelligencewillcontinuetobeanecessaryinvestmentfortheforeseeablefuture.

DrewLawyerSr.ProfessionalServicesConsultant,Earnix 

© Earnix 2015  5

  

CompetitiveAnalysisTeamClosetohalfofthecompaniessurveyed(42%)haveadedicatedcompetitiveanalysisteam.

Figure1:Haveadedicatedcompetitiveanalysisteam

Whetheracompanyhasadedicatedteamforcompetitiveanalysiscorrelatestothecompanysize.67%ofthecompanieswithover$5BinGrossWrittenPremium(GWP)haveadedicatedteam,comparedtojust13%ofthecompanieswithlessthan$250MinGWP.

 

Figure2:Percentofcompaniesthathaveadedicatedcompetitiveanalysisteam 

Yes42%

No58%

13%

37% 39%

67%

88%

63% 61%

33%

< $250M $250M‐$1B $1B‐$5B > $5B

Gross Written Premium for personal lines insurance (2014) 

Have a dedicated team

No

Yes

© Earnix 2015  6

  

CompetitiveAnalysisTeamWhiletheaveragesizeofcompetitiveanalysisteamsisrightaroundfourpeople,43%ofthecompaniesthathaveadedicatedteamhavefiveormoremembersworkingintheseteams.

 

Figure3:NumberofpeopleincompetitiveanalysisteamProductmanagement has the primary responsibility for competitive analysis in 42%of thecompaniesthatdon’thaveadedicatedteam.Inaquarter(25%)ofthecompanies,severaldepartmentsdotheanalysisrelatedtotheirareaof expertise. The actuarial group is responsible for competitive analysis in 13% of thecompanies.

  

Figure4:Primaryresponsibilityforcompetitiveanalysis    

16%

42%

32%

11%

1‐2 3‐4 5‐10 10+

Average: 4.1

4%

4%

8%

13%

25%

42%

No person or group is responsible for competitiveanalysis

Finance

Sales Management

Actuarial Group

Several departments do the analysis related to theirarea of expertise

Product Management

© Earnix 2015  7

  

WhichCompetitorsAreAnalyzed?Whenselectingwhichcompetitorstoanalyze,mostcompanieschoosetheirlargestcompetitors.Asmany as 42% of the respondents target the largestwriters of each line of business in theprimarydistributionchannelofthecompany,andanother21%targetthelargestwritersineachstate/provinceregardlessofdistributionchannel.

 

Figure5:Topcriteriausedtodeterminewhichcompetitorstoanalyze 

 

Whiletheaveragenumberofcompetitorstrackedineachstate/provinceisrightaroundfive,28%ofthecompaniesaretrackingsevenormorecompetitors.

Figure6:Activelytrackingcompetitorsperstate/province   

9%

7%

9%

12%

21%

42%

Other

The companies with the best operating results

The largest writers of each line of business in the country

The companies deemed to be most innovative

The largest writers in each state/province

The largest writers of each line of business in the primarydistribution channel of the company

23%

49%

12%

16%

3 or less 4‐6 7‐9 10+

Average: 5.1

© Earnix 2015  8

  

TypesandUsesofCompetitiveAnalysisAlmosteverycompanysurveyed(93%)performsratestructureandratecompetitiveanalysis.Othercommontypesof competitiveanalysis includeproduct features (79%),coveragesandcontracts(70%),financialmetrics(58%),andunderwritingguidelines(56%).  

 

Figure7:Typesofcompetitiveanalysisperformed(Respondentscouldselectmorethanoneoption) 

Themajorityof thecompaniessurveyed (72%)usecompetitiveanalysis information togaugeoverallcompetitiveness,guidefactorselectionand/ordetermineoverallratelevel.Othercommonusesofcompetitiveinformationincludeavoidingadverseselection(47%),addingcredibilitytobusinesssegmentsinareaswithlowdatavolumeandsupportforcompanyfilings(37%each).

 

Figure8:Top3usesofcompetitiveanalysisinformation(Respondentscouldselectmorethanoneoption) 

21%

44%

56%

58%

70%

79%

93%

Marketing spend and tactics

Overall business strategy

Underwriting guidelines

Financial metrics

Coverages and contracts

Product features

Rate structures and rates

7%

14%

19%

26%

37%

37%

47%

72%

Anticipating future competitor actions and preempt them

Adopting strategies and tactics used by leading carriers

Help build our research agenda

Implementing similar tactics over time when proven

Support our filings

Credibility complement due to low data volume in certaingeographies or sublines

Making sure we are not adversely selected against

Gauge overall competitiveness, guide our factor selectionsand/or determine overall rate level

© Earnix 2015  9

  

SourcesofInformationUsedforCompetitiveAnalysisThe majority of survey respondents (79%) use company filings as their leading source ofinformationforconductingcompetitiveanalysis.  

Vendor reports that aggregate competitor data (70%), company annual / quarterly reports(65%),companywebsite(63%),andinformationcollectedfromagentsandsalesreps(58%)areadditionalsourcescommonlyusedbycompanies.  

 

Figure9:Sourcesofinformationusedforcompetitiveanalysis(Respondentscouldselectmorethanoneoption)

  

 

16%

37%

40%

47%

49%

58%

63%

65%

70%

79%

Marketing spend reports

Analyst reports

Investor conference calls

Industry conferences and meetings

Trade publications and newsletters

Information collected from agents and sales reps

Company website

Company annual/quarterly reports

Vendor reports that aggregate competitor data

Company filings

© Earnix 2015  10

  

EffectivenessofCompetitiveAnalysisEffortsMostcompaniesviewtheircompetitiveanalysiseffortsaseffective,withanaveragescoreof3.4onascaleof1‐5.Almosthalfoftherespondents(44%)rateditasa4orabove.  

Figure10:Effectivenessofcompetitiveanalysisefforts 

Regardlessofcompanysize, theeffectivenessofcompetitiveanalysisefforts isperceivedtobehigherwhencompanieshaveadedicatedcompetitiveanalysisteam. 

 

  

Figure11:Effectivenessofcompetitiveanalysiseffortsbycompanysize    

0%

9%

47%

35%

9%

1 ‐ Not EffectiveAt All

2 3 4 5 ‐ HighlyEffective

Average: 3.4

4.00 4.00

3.092.85

<$1B >$1BGross Written Premium for personal lines insurance (2014) 

Have a dedicated team

Yes

No

© Earnix 2015  11

  

InvestmentandImprovementsinCompetitiveAnalysisClosetohalfoftherespondents(47%)plantoinvestmoreincompetitiveanalysisinthenext12months.51%planonkeepingthecurrentlevelofinvestment,whileonly2%intendtoinvestless. 

 

Figure12:Investmentincompetitiveanalysisinthenext12months

 

Accordingtosurveyrespondents,betteranalysistools(58%)andbetterdatacollection(51%)wouldbethetopchoicesforimprovingtheeffectivenessofcompetitiveanalysis.

Otherimprovementsmentionedinclude:

Moreactionablerecommendations Morestructuredprocesses  Moretimelyanalysis

Figure13:Topimprovementsforamoreeffectivecompetitiveanalysis(Respondentscouldselectmorethanoneoption) 

   

We anticipate investing more

47%

No change51%

We anticipate investing less

2%

21%

30%

33%

37%

40%

51%

58%

Broader dissemination of analysis

A dedicated Competitive Analysis team

More timely analysis

More structured processes

More actionable recommendations

Better data collection

Better analysis tools

© Earnix 2015  12

  

CompetitorRateAnalysisPracticesWith the increased complexity of competitors’ rating plans, companies are adapting theirtoolsetforcomparingpremiums.Adecadeago,acompanycouldmaintainitscompetitors’ratesinabasicExcelworkbook.Eachtimeacompanychangedrates,theworkbookwouldbeupdatedwiththenewfactors.Thesedaysaregone(oratleastquicklydisappearing).Insurersarenowrelyingmoreheavilyoncompetitive rating tools.87%of the companiessurveyedciteusingvendorstoacquire/calculatepremiumsfortheircompetition.

Unfortunately,thesetoolsarenotwithouttheirowncomplexity.Inmanycases,companiesdonothavetherelevantpolicyinformationtopopulatethesetoolsandbroadassumptionsmustbemade(e.g.credit,underwriting,telematics).Somecompaniesinvestsignificantlytoperfecttheseassumptionsandproducethemostaccuratecompetitiveanalysispossible,whileotherssavetimeandenergybyjustmakingmoregeneralizedassumptions.

Onethingabouttheseassumptionsisthattheycanevolveovertime.Creditestimationisoneexample:21%ofcompaniesareusingavarietyofmethodstoimputetheircompetitors’creditscores.Overtime,companieshavebeenabletorefinetheircreditscoreestimation,resultinginmultiplemethodsusedthroughouttheindustry.However,fornewerprogramsliketelematics,most companies (71%) are just assuming no discount applies. As adoption becomes morewidespread and the focus shifts to finding a competitive niche within telematics, theseassumptionswillsurelybecomemorerefined.

Evenwithall theseassumptionsbuilt intotheprocess,companiesarestillmostlyconfidentintheresultingpremiums.Halfofthecompaniessurveyedarehighlyconfidentintheaccuracyoftheircalculatedcompetitors’rates.

Theprimaryuseofcompetitiverateanalysiscitedinthissurveyisgaugingcompetitivemarketposition(92%).Whiletherearemultiplewaystogaugeyourcompany’scompetitiveposition,somemethodsarelesspronethanotherstobiasesintroducedbytheinherentimperfectionsoftheassumptions.Forexample,maintainingthesamerateassumptionsovertimeandmeasuringthe changes in competitive position can provide a good indication of how companies arechangingratesbysegment,eveniftheaggregateleveleffectmightbeoff.Companiesthatareregularlychangingtheirunderlyingassumptionsfinditmoredifficulttounderstandhowtheircompetitivepositionischangingovertime.

Althoughcompetitiverateanalysisisanimperfectscience,companiesarestillfindingvalueinthe results and use the information to guild many aspects of the pricing process such ascredibilitycomplementsanddefiningterritoryboundaries.Withpricecompetitionconsistentlyincreasing,companieswillcontinuetofindinnovativewaystoleveragecompetitivepricingdataforyearstocome.

DrewLawyerSr.ProfessionalServicesConsultant,Earnix 

“Ifyouknowtheothersandknowyourself,youwillnotbeimperiledinahundredbattles.”‐‐SūnZǐ,6thcenturyBCEChinesegeneralwhowroteTheArtofWar 

© Earnix 2015  13

  

ObtainingCompetitorPremiumsClose to two‐thirds of the respondent (62%) use their own quotes to assemble themarketbasketofriskstheycomparetotheircompetitors.Simulatingdataforahypotheticalmarketbasketandusingtheirownin‐forcepolicieswerementionedby46%oftherespondents,while41%oftherespondentpurchasequotesfromanoutsidevendorinordertoassemblethemarketbasketofrisks.

Figure14:Waystoassemblemarketbasketofrisksforwhichratesarecompared(Respondentscouldselectmorethanoneoption) 

Thevastmajorityofthecompanies(87%)obtaincompetitorpremiumsfromcomparativeratingvendors. 35% mentioned that their agents provide competitor premiums, 34% calculatecompetitorspremiumsbycollectionfilings,and30%purchasepremiumsfromanoutsidevendor.

 

Figure15:Waystoobtaincompetitorspremiums(Respondentscouldselectmorethanoneoption)

   

32%

41%

46%

46%

62%

We obtain quotes from our agents/brokers

We purchase quotes from an outside vendor

We use our in‐force policies

We simulate risk data for a hypothetical marketbasket

We use our own quotes

30%

34%

35%

87%

We purchase premiums from an outsidevendor

We calculate competitor premiums bycollecting filings

Our agents provide competitor premiums

We obtain premiums from comparative ratingvendors

© Earnix 2015  14

  

AssigningCreditScoresCompanies use a variety ofways to handle credit scoringwhen programming competitors’rates.Moreover,21%ofthecompaniesusedifferentmethodsfordifferentcompetitors.Popularmethodsusedbythesecompaniesinclude:

Reverseengineeringofcompetitors’creditscoringsystems Usinganexternalvendortoassigncreditscores Assumingsimilarcreditscoregrouptowhattheircompanyassigned

Only12%ofthecompaniesignorecreditscorevarianceandusejustasinglecredittier. 

  

Figure16:Waystohandlecreditscoringwhenprogramingcompetitors'ratesinternally 

   

6%

12%

18%

18%

21%

21%

We make assumptions about the credit score groupbased on risk characteristics

We only consider a single credit tier

We calculate competitors' rates assuming a similar creditscore group to what our company assigned to the risk

We rely on an external vendor for assigning the competitors’ credit scores

We have (reverse) engineered our competitors creditscoring system

We use different methods for different competitors

© Earnix 2015  15

  

ConfidenceinEstimatingCompetitors’CreditScoresConfidenceinestimatingcompetitors’creditscoresisnotveryhigh,withanaveragescoreof2.8onascaleof1‐5.Overathirdofthecompanies(36%)ratestheirconfidence2orless.

Figure17:Confidenceinestimatingcompetitors’creditscoresThe confidence in estimating competitors’ credit scores is higher when companies have adedicatedcompetitiveanalysisteam,regardlessofcompanysize.

 

Figure18:Confidenceinestimatingcompetitors’creditscoresbycompanysize  

15%

21%

36%

21%

6%

1 ‐ Not TooConfident

2 3 4 5 ‐ HighlyConfident

3.80

3.38

2.60

2.00

<$1B >$1B

Gross Written Premium for personal lines insurance (2014) 

Have a dedicated team

Yes

No

Average: 2.8

© Earnix 2015  16

  

AssigningTelematicsDiscountsMostrespondents(71%)assumenotelematicsdiscountwhenprogramingcompetitors’ratesinternally.9%oftherespondentsmakedistributionalassumptionsaboutwhoreceivesadiscountandhowlargeitis,andanother9%onlyapplytheinitialofferdiscount.

Figure19:Waystohandletelematicsscoreswhenprogramingcompetitors'ratesinternally

 

   

9%

3%

9%

9%

71%

Other

We use internal data to score competitors’ telematics models

We only apply the initial offer discount

We make distributional assumptions about whoreceives a discount and how large

We assume no telematics discount

© Earnix 2015  17

  

UseofCompetitorRateAnalysis,FrequencyofUpdatesAlmostallsurveyrespondents(92%)usetheresultsoftheircompetitorrateanalysistogaugetheircompetitivemarketposition.Additionalcommonusesinclude:

Guidefactorselections Getideasforhowtorefinetheirownratestructure Defineterritorialboundaries

Figure20:Useofcompetitors’rateanalysis(Respondentscouldselectmorethanoneoption)

 

Closetohalf(49%)ofthecompaniessurveyedupdatecompetitorrateseverytimetheyworkonaratechange.Another37%oftherespondentsupdatecompetitors’ratesonaregularbasis,while11%updatethematarandomfrequency.

 

Figure21:Frequencyofupdatingcompetitors’rates 

44%

50%

56%

58%

69%

92%

Consider competitor premiums when setting ouroverall rate level

Estimate the impact on new business growth andother metrics for any rate change

Define our own territorial boundaries

Get ideas for how to refine our own rate structure

Guide our factor selections

Gauge our competitive market and market positions

Every time we are working on a rate 

change49%

Whenever an important 

competitor changes rates3%

On a regular basis 37%

On a random basis11%

© Earnix 2015  18

  

ImpactofInsuranceShoppingSitesTheemergenceofinsuranceshoppingsitesismakingcompetitorrateanalysismoreimportantintheeyesofmanyoftherespondents(43%),while54%oftherespondentsexpressednochange.Only3%saiditbecamelessimportant.

 

Figure22:Competitorrateanalysisinlightofautoinsuranceshoppingsites

Smallercompaniesaremoreaffectedbytheriseofshoppingsites.Asmanyas50%ofthesmallercompaniessaytheircompetitorrateanalysishasbecomemoreimportantcomparedtojust39%ofthelargercompanies.

Figure23:Competitorrateanalysisinlightofshoppingsitesbycompanysize

 

More important

43%

Less important

3%

Has not changed in importance

54%

50%39%

50%61%

<$1B >$1B

Gross Written Premium for personal lines insurance (2014) 

No change orless important

More important

© Earnix 2015  19

  

ConfidenceintheAccuracyofCompetitors’RatesMostcompaniesarequiteconfident in theaccuracyof their calculatedcompetitors’ rates.Theaveragescoreis3.3onascaleof1‐5,and50%oftherespondentsratetheirconfidenceasa4orhigher.

Figure24:Confidenceintheaccuracyofthecalculated/derivedcompetitors’rates

Accordingtosurveyresults,itseemsthathavingadedicatedcompetitiveanalysisteamhasonlyaminorimpactontheconfidenceintheaccuracyofcalculatedcompetitors’rates.

 

Figure25:Confidenceintheaccuracyofthecalculated/derivedcompetitors’ratesbycompanysize 

6%

14%

31%

44%

6%

1 ‐ Not TooConfident

2 3 4 5 ‐ HighlyConfident

3.403.75

3.27 3.22

<$1B >$1B

Gross Written Premium for personal lines insurance (2014) 

Have a dedicated team

Yes

No

Average: 3.3

© Earnix 2015  20

  

HowtoMakeCompetitorRateAnalysisMoreEffective?Close to two‐thirds (65%) of the respondents acknowledge the usefulness of competitor rateanalysisbyratingthema4orhigheronascaleof1‐5.Theaveragescoreacrossallrespondentsis3.8.

Figure26:Usefulnessofcompetitorrateanalysis

Thetopimprovementsthatwouldmakeforamoreeffectivecompetitiverateanalysisaccordingtotherespondentsareimprovedaccuracyofcompetitors’rates(70%)andbetterunderstandingofcompetitors’creditscoringalgorithms(68%).

Figure27:Topthreeimprovementsforamoreeffectivecompetitorrateanalysis(Respondentscouldselectmorethanoneoption) 

 

0%

5%

30%

43%

22%

1 ‐ Not Useful AtAll

2 3 4 5 ‐ Very Useful

11%

19%

19%

32%

49%

68%

70%

More actionable recommendations

A more representative sample of risks

Being informed of competitor rate changes ona more timely basis

Better understanding of competitorunderwriting rules

Better analysis tools

Better understanding of competitor creditscoring algorithms

Improved accuracy of competitor rates

Average: 3.8

© Earnix 2015  21

  

RespondentDemographics:CompanyLinesandSizeThevastmajorityoftherespondents(79%)offerbothautoandhomeinsurance,while13%offeronlyautoinsuranceand8%onlyhomeinsurance.

Figure28:Productoffered 

Survey respondents represent a mix of small and large companies, with over half of therespondents (55%) representing companies with more than $1B in Gross Written Premium(GWP).

 

Figure29:PersonallineinsuranceGrossWrittenPremium(2014) 

 

 

 

Auto13%

Home8%

Both79%

13%12%

20%

45%

10%

< $250M $250‐$500M $500M‐$1B $1B‐$5B > $5B

© Earnix 2015  22

  

RespondentDemographics:RoleintheCompanyThethreerolescomprisingthemajorityofsurveyrespondentsincludeR&Danalystsormanagers(34%),companyexecutives(26%),andpricinganalystsormanagers(23%).

 

Figure30:Respondentrole 

34%

26%

23%

9%

3%6%

R&D Analyst or Manager

Executive Management

Pricing Analyst or Manager

Product/State Manager

Finance

Other

© Earnix 2015  23

  

TableofFigures

Figure1:Haveadedicatedcompetitiveanalysisteam .................................................................. 5 Figure2:Percentofcompaniesthathaveadedicatedcompetitiveanalysisteam ........................... 5 Figure3:Numberofpeopleincompetitiveanalysisteam .............................................................. 6 Figure4:Primaryresponsibilityforcompetitiveanalysis .............................................................. 6 Figure5:Topcriteriausedtodeterminewhichcompetitortoanalyze ........................................... 7 Figure6:Activelytrackingcompetitorsperstale/province ........................................................... 7 Figure7:Typesofcompetitiveanalysisperformed ........................................................................ 8 Figure8:Top3usesofcompetitiveanalysisinformation ............................................................... 8 Figure9:Sourcesofinformationusedforcompetitiveanalysis ...................................................... 9 Figure10:Effectivenessofcompetitiveanalysisefforts ............................................................... 10 Figure11:Effectivenessofcompetitiveanalysiseffortsbycompanysize ...................................... 10 Figure12:Investmentincompetitiveanalysisinthenext12months ........................................... 11 Figure13:Topimprovementsforamoreeffectivecompetitiveanalysis ....................................... 11 Figure14:Waystoassemblemarketbasketofrisksforwhichratesarecompared ....................... 13 Figure15:Waystoobtaincompetitorspremiums ....................................................................... 13 Figure16:Waystohandlecreditscoringwhenprogramingcompetitors'ratesinternally ............ 14 Figure17:Confidenceinestimatingcompetitors’creditscores .................................................... 15 Figure18:Confidenceinestimatingcompetitors’creditscoresbycompanysize ........................... 15 Figure19:Waystohandletelematicsscoreswhenprogramingcompetitors'ratesinternally ....... 16 Figure20:Useofcompetitors’rateanalysis ............................................................................... 17 Figure21:Frequencyofupdatingcompetitors’rates .................................................................. 17 Figure22:Competitorrateanalysisinlightofautoinsuranceshoppingsites ............................... 18 Figure23:Competitorrateanalysisinlightofshoppingsitesbycompanysize ............................. 18 Figure24:Confidenceintheaccuracyofthecalculated/derivedcompetitorrates ........................ 19 Figure25:Confidenceintheaccuracyofthecalculated/derivedcompetitorratesbycompanysize ................................................................................................................................................ 19 Figure26:Usefulnessofcompetitorrateanalysis ....................................................................... 20 Figure27:Topthreeimprovementsforamoreeffectivecompetitorrateanalysis ........................ 20 Figure28:ProductOffered ........................................................................................................ 21 Figure29:PersonallineinsuranceGrossWrittenPremium(2014) .............................................. 21 Figure30:ResponddtnsRole ..................................................................................................... 22  

   

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AboutEarnixEarnixIntegratedPricingandCustomerAnalyticssoftwareempowersfinancialservicescompanies to predict customer demand and its impact on business performance,enablingthealignmentofpricingandproductswithchangingmarketdynamics.Earnixcombinesriskanddemandmodelingwithreal‐timeconnectivity tocoreoperationalsystems,bringingthepowerofanalytic‐drivendecisionstoeverycustomerinteractioninanyregulatoryenvironment.LeadingbanksandinsurancecompaniesrelyonEarnixsolutionstooptimizethepricesofdeposits,loans,andpolicies,deliveringgreatervaluetocustomersandhigherreturnstoshareholders.   

Formoreinformationvisit: www.earnix.com

   

 

 

 

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