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 business rules creation (loadings, discounts, taxes, fees, caps etc.), deployment and management. Although connected as processes, 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 to these processes, minimizing the error-prone, cumbersome manual efforts and allowing a wider range of users to work with the sophistication of applied mathematics. ABACUS’s innovation lies in two distinct fields:
First, regarding the Pricing engine, adding ML-based algorithms to the commonly used GLM models allows a greater number of risk factors to be taken into account and captures more 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.
Second, regarding the Rating Engine the process of deploying the new approved prices is completely automated, boosting the time to market capabilities of the insurer. It removes the need for manual and error-prone configuration of premium calculation rules thus removing the process IT dependency entirely.
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 personalizsation.,
Designed to support all business lines in insurance - P&C, Life, Health, etc.
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 engines – Pricing and Rating, 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 premium management cycle: ABACUS takes into account loadings, discounts, additional rules as well as country legislation (taxes, for example).
Eliminates the need for configuration of premium calculation rules: Deployment of new prices in ABACUS happens automatically, eliminating 100% of the process IT dependency
By adding advanced Machine Learning (ML) algorithms to the commonly used GLM models, ABACUS allows the use of a wider range of risk factors, thus deriving 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