AXA unveils real-time pricing assault

AXA is rolling out real-time pricing on personal lines, which it says will level the playing field between brokers and direct writers.

It can take up to eight weeks for the changes insurers make to their personal lines rates to reach brokers because the new rates have to be programmed into the software that brokers use and an update issued.

But under insurer-hosted pricing (IHP), the software will instead look to AXA’s own servers for the latest rates – meaning the insurer can change rates for its brokers as quickly as direct writers.

Personal lines intermediary managing director Karen Hogg said: “We’ll be able to get more business into the broker market by being able to replicate some of the advantages of the direct market.”

“I can’t even begin to tell you how different that is from anything we’ve ever been able to do before.”

Hogg said software house deadlines were “the biggest barrier to trading and making money”.

“Software houses play an important role, but the reality is that to make a decision and implement a change can take quite a long time,” Hogg said.

“In January, we were able to make the decision to reduce our rates to respond to market pressure. We had scope to do that, but we couldn’t apply it until March. With IHP, we’ll be able to apply rate changes that day.”

Live now

AXA’s IHP rollout began with 400 SSP brokers for motor insurance in August. Hogg said it had seen an increase in GWP from those brokers already.

Other software houses will go live on motor by the end of the year, with household insurance to follow by the end of Q1 2014.

Of the software houses, Hogg said: “We said to them: this is our vision, this is what we want. They’ve stepped up to the plate and said ‘we can help you make that happen’.”

AXA itself has invested heavily in IT to be able to provide 25 million personal lines quotes a day. It declined to put a figure on the investment, but said IHP amounted to a quarter of the total IT investment for personal lines intermediary this year.

Data scientists

Next year AXA plans to combine data enrichment with IHP to expand into higher premium motor risks.

“It will tell us far more about that risk and give us more confidence as an insurer about how to price it,” Hogg said.

“For the regional brokers I think that’s really important. The sorts of people that go into a broker for face-to-face service have a high premium. We’ll be doing all the checks like credit scoring from here, without the broker having to worry about them.”

As well as credit scoring, Hogg said AXA would draw on information available in the group.

AXA is also hiring a team of data scientists to explore the links and connections between different risks.

“They’re not underwriters or actuaries. Their job will be to make data really powerful for us by looking for new permutations and connections in masses of data.

“Initially this interests us from a pricing point of view and potential fraud behaviours, but will evolve rapidly,” Hogg added.

Battle ground

AXA’s move to IHP follows the launch of Personal Best by Aviva, which offers data-enriched quotes to brokers and access to real-time rates changes to some.

Acturis co-chief executive Theo Duchen said IHP would make AXA “one of the most advanced personal lines insurers in the broker market”.