Rating and pricing are among the most essential functions in insurance underwriting, directly impacting risk reduction and profitability. Insurers need precise rating and pricing processes to avoid over- or underpricing, ensure regulatory compliance, and maintain customer trust and loyalty.  

Traditionally, these processes rely on monolithic and complex legacy systems that can restrict speed, accuracy, and adaptability. But there’s a better way to optimize rating and pricing without disruption to the core systems insurers depend on and are hesitant to replace. 

By integrating a powerful low-code rules engine alongside their tech stack, insurers can run rating and pricing processes with near invisibility, avoiding any interference with legacy systems. The result is a win-win, as insurers can confidently augment rating and pricing capabilities while preserving their primary technology. 

The Challenges of Legacy Systems in Ratings and Pricing 

Legacy systems are designed to handle a wide range of insurance processes but are not optimized for today’s demands in rating and pricing. When insurers rely solely on these systems, they can face significant issues: 

• Slow and Costly Updates: Even minor updates to a legacy system can require extensive coding, testing, and deployment, costing both time and resources. 

• Rigid Infrastructure: Legacy systems aren’t built for the agility needed in today’s fast-paced market. Customizing them to accommodate frequent rating and pricing adjustments can lead to high costs and inefficiencies. 

• Limited Integration: To remain competitive, insurers increasingly need third-party data, such as real-time customer information, risk data, or market insights, into their pricing models. However, legacy systems often struggle to integrate data seamlessly, limiting insurers’ ability to make data-driven pricing decisions. 

Enhancing Ratings and Pricing with Low-Code Automation

1. Improving Rating Accuracy and Efficiency

Low-code platforms with a rules engine, like Decisions, streamline the rating process, ensuring consistent risk assessments with minimal manual input. 

• Automated Risk Classification: Rules engines instantly classify risk by analyzing factors like age, location, and claims history, reducing errors and ensuring consistent policy evaluation. 

• Data Consistency: Automated rules minimize manual entry, improving accuracy. 

• Scalability for High-Volume Processing: Automation platforms handle large volumes of ratings requests, enabling efficient processing during peak periods.

2. Streamlining Pricing Calculations with Integration and Flexibility

Pricing calculations often require multiple data sources. A low-code platform seamlessly integrates these into a unified workflow. 

• Integration with Legacy and External Data Sources: APIs pull real-time data from various systems, ensuring accurate, up-to-date pricing. 

• Dynamic Pricing Adjustments: Insurers can quickly modify pricing rules in response to new strategies or market changes. 

• Real-Time Premium Generation: Stateless architecture supports real-time premium adjustments, facilitating instant responses to customer inquiries. 

Key Benefits 

Using low-code automation for rating and pricing offers advantages beyond what legacy systems alone provide: 

• Faster, Accurate Decisions: Automated rules accelerate risk assessments and premium calculations. 

• Lower Operational Costs: Automation reduces time and effort, freeing resources for strategic initiatives. 

• Enhanced Compliance and Reliability: Consistent automation supports compliance, reducing risk and building trust. 

• Greater Scalability and Flexibility: Automation scales with demand fluctuations, while low-code flexibility allows for quick rule adjustments as regulations change. 

The Bottom Line: Competitive Advantage Through Modernization  

Ultimately, integrating a rules engine offers insurers a path to modernization that retains the stability of their legacy systems while enhancing their capabilities. It’s a seamless, low-risk approach to future-proofing the business for long-term success in a highly competitive and evolving industry. By running a powerful low-code platform alongside existing technology, insurers can: 

• Maximize their technology investments without disruptive replacements. 

• Adapt quickly to regulatory changes and market demands. 

• Deliver tailored pricing that resonates with customers and builds loyalty. 

Ready to optimize your ratings and pricing? Book a demo with our team to see how Decisions can transform your process efficiency.