Rating in the UK General Insurance Market

by Catherine Stagg-Macey, July 8, 2008


London, United Kingdom 8 July 2008

The evolution of pricing and rating approaches is now starting to overwhelm the technology that supports it. Insurers must look to update their supporting technology to deal with increasing complexity.

In a new report, , Celent examines the current pricing and rating environment for general insurance in the United Kingdom. There are increasing pressures on IT expenses, and even if yesterday’s technology could be cranked up to support new approaches, doing so would drive development and maintenance costs to unreasonable levels or require long lead times that insurers are unwilling to accept.

Every insurer should be looking at how they can address the challenges presented by the increasing expectations of consumers and brokers. Investment in the areas of rating and pricing could give them an unleveraged opportunity.

"The key word here is more," says Catherine Stagg-Macey, senior analyst with Celent’s Insurance Group and author of the report. "There are more data sources to consult, more channels to sell into, more market strategies to implement. Insurers need high levels of technology to be able to process this changing world effectively."

This report covers some of the technology challenges for this area of the insurance business and the solutions available to address these challenges. The goal of this report is to help technology staff understand the complexity of rating and pricing. This knowledge should better equip IT to support the business.

The 22-page report contains four figures and three tables. A table of contents is available online.


Members of Celent's Property/Casualty Insurance research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.


Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

London, United Kingdom 8 July 2008

Executive Summary 3
Introduction 4
  The Approach for This Report 4
  A Note on Terminology 5
Rules, Underwriting, and Pricing 6
  Rules in the Underwriting Process 6
  The Proliferation of Data Sources 7
  The Role of Pricing in Underwriting 8
  What's in a Price? 9
  The Anatomy of Pricing 9
  Pricing Approaches 10
  Variations of Pricing Models by Sector 10
Evolving Business Pressures 11
  The State of Play Today 11
  The Distribution Landscape 12
  The Financial Impact of Pricing 12
  Complexity as the Key Driver of Change 13
  Complexity 15
The Role of Technology 16
  The Technology for Consideration 16
  The Basis for the Business Case 17
Conclusions 19


Sign in to download reports and access personalized information