Serdica ABACUS - ML-based Pricing & Rating Engines
Overview
ABACUS - a powerful ML-based tool that optimizes Prices and Rating processes in insurance companies. ABACUS is highly adaptive to every legacy system and easy to integrate with any external one. It consists of two engines – Pricing Engine for use by actuaries in premium model development and Rating engine for use by underwriters for premium adjustment rules creation (loadings, discounts, taxes, fees, caps, etc.), deployment, and management. Although connected, each Engine can operate as a stand-alone solution. ABACUS's uniqueness lies in bringing game-changing technological innovations in redefining pricing and rating. ABACUS brings next-level speed and accuracy in these processes, minimizing the error-prone, cumbersome manual efforts and allowing a wider range of users to work with the sophistication of applied mathematics.
Firstly, as far as the Pricing Engine is concerned, adding ML-based algorithms to the widely used GLM ones allows a greater number of risk factors to be taken into account and captures complex patterns and non-linear dependencies between them. Something that is not possible to achieve relying solely on GLM models.
This new approach results in more precise segmentation, better risk assessment, and ultimately another level of personalization.
Secondly, regarding the Rating Engine the process of deploying the new approved prices is completely automated boosting the time to market capabilities of the insurer.
Key Features
A wider range of algorithms in use:
Together with traditional GLM models, ABACUS uses advanced ML algorithms, which leads to more captured interdependencies and results in precise segmentation and hence, greater personalization.,
Designed to support all insurance businesses:
ABACUS is designed to address all lines of business of the insurer including P&C, Life, and Health.
Built-in Scenario Simulation tool:
The insurer can easily simulate the impact of new prices on the portfolio and estimate the expected profit/loss before actually deploying the new prices into production.
Easy integration with all external systems:
ABACUS consists of two independent Pricing and Rating Engines, which can be easily integrated with any external system. Serdica’s Rating Engine has an API specifically designed for integration with Policy Administration Systems or any other system that includes premium calculation in the business process so that the pricing process is streamlined.
Covers the entire product management cycle:
ABACUS transforms both Pricing and Rating processes,
Eliminates the need for configuration of premium calculation rules:
ABACUS also features automatic deployment, eliminating 100% of the process IT dependency
Key Benefits
- Utilizing Machine Learning (ML), Serdica ABACUS allows the employment of a wider range of risk factors, thus deriving and utilizing the optimal risk segments for the portfolio
- Superior personalization due to the increased number of risk segments
- Increased Net Profit for the insurer
- Substantially reduces the time for completion of both Pricing and Rating processes, from 3 months to 5 days
- 60% less actuarial effort
- 100% less IT effort for Rating setup and configuration
