UK insurance pricing platform Hyperexponential says legacy systems are holding back innovation and insurer efficiency, profitability and collaboration.

Underwriters spend three hours a day, on average, manually entering data into systems, its State of Pricing report says, while 76% of actuaries take more than a month to build a new pricing model, and 14% take more than a year.

It takes more than 30 days to implement a complex parameter and algorithm change for almost half of respondents to a survey of 350 British and US underwriters and actuaries.

Hyperexponential CEO Amrit Santhirasenan says the insurance industry is “increasingly playing catch up” on technological transformation, while other legacy tech-dependent sectors show digital projects can be delivered “far quicker”. 

The true value of artificial intelligence “can only be fully harnessed when insurers get their own houses in order”, Mr Santhirasenan says.

“The sector’s current pricing infrastructure doesn’t have the capacity to support this technological innovation. An over-reliance on archaic, inefficient and ineffective processes and technology is proving a major barrier.”

Only 21% of actuaries and underwriters feel their pricing technology enables them to make the best data-driven decisions, while 45% see it as a barrier to optimal profitability.

Manual tasks such as data cleansing and re-keying can be sped up with the right pricing technology and rich data sets, according to Hyperexponential.

“This can also cultivate a more productive, collaborative and future-focused environment that gives insurers a competitive edge, priming them to take advantage of groundbreaking technological innovation such as AI,” Mr Santhirasenan said.

Integration and implementation of new technology remain key barriers, hampering efficiency and “wasting hours of skilled labour”. They also affect collaboration between “the most fundamental cogs in the pricing workflow” – underwriters, actuaries and IT.

Hyperexponential, which has offices in Warsaw and New York, says insurance brands now write more than $US45 billion ($68 billion) of premium annually through its hx Renew platform, with users including Aviva, Munich Re and Markel.