Aon updates Pricing Platform as more gain benefits from automated underwriting

24 April 2024

Aon’s latest release of its Pricing Platform has added new capabilities designed to help re/insurance underwriters access the benefits of improved automation. 

The platform, launched last year, seeks to provide underwriters with tailored workflows containing all the necessary analytics. It also enables actuaries to quickly build pricing models without IT assistance, and delivers near real-time portfolio analysis to manage opportunities to the firm’s risk appetite, according to Aon.

The Pricing Platform has a suite of pre-built models that helps pricing models launch quickly. The selection has recently been extended, including models for US financial lines and cyber, geospatial mapping technologies and portfolio insights. 

There are several options for the calculation engine behind the platform, explained Sam Worthington, managing director in Aon’s Strategy and Technology Group. For more straightforward models, the engine can be written in the Python programming language, while for more data-intensive models, Aon’s Tyche platform delivers the fastest processing speed. The group is going to add an engine based on the R language, giving coders access to its wide selection of statistical libraries, Worthington added.

In personal lines insurance, the majority of business is written algorithmically, while most corporate risks are still underwritten manually. In the SME and follow markets, algorithmic underwriting is making serious inroads, exemplified by Brit Insurance’s fully algorithmic syndicate Ki, which wrote $877m of gross premiums in 2023.

“The industry trend is clear: commercial risk underwriting is increasingly automated,” Worthington told InsuranceERM.

Automating underwriting depends on the ability to deliver straight-through processing, typically involving several steps. 

One of the largest barriers is the intake of unstructured data. Information about a commercial risk is often provided in the form of PDFs, Word documents and Excel spreadsheets, and reviewing, transforming and entering this into pricing models consumes underwriters’ time. 

Aon has collaborated with a third-party data workflow provider to automate data ingestion, Worthington said. “It gives the underwriter the headspace for better risk selection and speeds-up quoting. In some markets, the speed of response to the broker is the main factor that determines the quote conversion rate. Automating parts of the underwriting process can be a real differentiator.”

Where third party data is needed, Aon’s Pricing Platform can integrate with data sources through its APIs to improve risk selection. For example, consuming data from water level sensors if writing a parametric flood policy, or data from digitally connected thermometers to monitor temperature-sensitive cargoes.

“Aon’s Pricing Platform is a channel for the industry to get access to Aon’s market data,” Worthington added. 

The platform is being used by clients globally, with $10bn flowing through it annually, according to Aon.