Software provider Montoux has released an income protection module for its life insurance pricing tool.

It comes as life insurers strive to make income protection business more profitable.

According to Munich Re, premium rates for income protection are 35% below levels that would cover claim costs and deliver a reasonable profit margin.

New Zealand-based Montoux’s CEO Klaas Stijnen says the new module is a response to this need.

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

Mr Stijnen, an actuary, says life insurance modelling tools are cumbersome, and actuarial insights are not used to their maximum advantage.

“This stifles innovation and eats up precious time for getting products to market. This is one of the factors preventing insurers from fixing the problem.”

He says most life insurers still rely on legacy systems, which can stop them undertaking serious analysis of changing markets. “It makes them slow and unable to take advantage of opportunities. Now it’s time to make income protection profitable again.”