In highly competitive markets good risk models are the bedrock of profitable results, but they are not always enough. Being able to adjust your profit margins at a deep customer level is essential for maximising your income and margin. A strong optimisation process can shave precious points off of your Combined Operating Ratio (COR). However more than this it can also help inform your strategic approach to pricing, customer acquisition planning, resource management, and align your pricing and finance teams to work seamlessly together.

The Benefits

• Improve COR by focusing on what you can control – optimal prices built on top of solid technical models.
• Take control of your business by understanding what is possible and where your key customer base lies.
• Align to business plans by co-ordinating pricing and finance to understand what are your profit and loss drivers.

The Infrastructure

• Iterative optimisation processes use small but frequent changes to ensure model accuracy and keep pace with a rapidly changing market.
• Price Tests that align with your optimisation strategy, built in a way to give true insight into the effectiveness of your rate changes.
• Search Space algorithms that accurately and precisely measure and predict the impact on every customer.

The Modelling

• Elasticity models that focus on reliability and consistency, utilising three post-model processes to ensure you hit the mark time after time.
• Market prediction models with accuracy rates of >10% within +/-1%, >70% within +/- 10%, and >99% within +/- 50%.
• Value calculations that are easy and smooth, reducing algorithm complexity and ensuring accuracy and transparency.

The Process

• Listen to business goals about your customer base and what you want optimisation to achieve.
• Rebuild the algorithm bespoke to your needs, combining periodic optimisation with trading changes that can be run quickly and easily.
• Redesign the process to give true strategic level control to your leadership team.

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