Insurer reactions 'too slow'

An insurance software provider says New Zealand insurers take too long to get new products and pricing to market, and it is costing them money.

Monday, June 27th 2016, 6:00AM

by Susan Edmunds

Montoux has announced the release of an income protection module as the new addition to its suite of life insurance pricing applications.

Klaas Stijnen, chief executive of Montoux, said the product would help insurers in Australia tackle a lack of profitability in income protection products, and in New Zealand help insurers get a better handle on the price points involved in income protection products.

“Our pricing application gives insurers the tools to increase their agility, allowing them to react quickly to market pressures. We noticed that IP had become a problem, so it’s a good time to provide a workable solution.”

He said the industry's actuarial modelling tools were cumbersome and time-consuming.

It could take nine to 12 months from the moment an insurer decided to change a product to the time it was able to be brought to market. In the meantime, competitors could come out with better products that would attract advisers, he said.

"Most insurers are still relying on tools and processes that make it almost impossible to do in-depth analysis within a reasonable time frame. It makes them slow and unable to take advantage of opportunities.”

He said the Montoux pricing application could speed up product pricing by up to 80%, saving months off the current product development cycle. “It’s already been proven priceless for life insurance,” says Klaas, “now it’s time to make income protection profitable again.”

Klaas said his software was already used by insurers on both sides of the Tasman and his firm was in talks with others.

"Life insurance is the last industry being disrupted. It's still very traditional. It didn't have to do much for a long time because business was going okay, ticking over but technology is starting to impact the life insurance industry now and we do see more product development and harder questions being asked and answered."

Tags: Income Protection