Revenue Management & Insurance Cycle

This paper investigates how an insurer’s pricing strategy can be adapted to respond to market conditions, and in particular the insurance cycle. For this purpose, we explore the use of dynamic pricing strategies, such as the revenue management techniques used by other industries (e.g., airlines, car rentals, internet service providers) in an insurance context. We then compare these dynamic pricing techniques with the static ones currently used in the market, and demonstrate that they can prove very valuable to insurers looking to enhance their competitive strategy.

Keywords: Cycle management, dynamic pricing, profit optimization, revenue management, dynamic programming