How to Successfully Manage the Pricing Decision Process

Determining insurance prices certainly has actuarial implications, but it's too important to be left solely to actuaries. Insurers which successfully manage the pricing decision process all recognize pricing as an integral part of the annual operational planning process. Good pricing decisions are designed to produce the planned financial results by coordinating actuarial, underwriting, marketing and claim considerations. This paper discusses both the common characteristics of well-managed pricing decisions and the characteristics of pricing decision processes which have often been unsuccessful. The roles which an actuary can, and should, play in the pricing decision process are also identified. General