Managing the Product Factory

For specific details about creating a product, consult the Creating Insurance Products page.

Related to this topic:

The Insurance Product Factory maintains the underlying data in a consistent data model. Consequently, you have a reliable data model for your insurance products that you can reference when you build your digital journeys. This allows you to manage your product portfolio at will, without having to re-code your digital journeys every time an insurance product is added, updated, or retired.

Insurance Business Formulas

Insurance companies monitor the performance of their products to ensure that they can generate the required level of profit, which is the difference between net premium collected (income) and the cost of claims paid (expenses). Consequently, insurers must constantly adjust premium rates and coverage to maintain a balance between profitability and price competitiveness. Nowadays, this task becomes increasingly complex and requires an ever increasing amount of calculations.

Introducing the FintechOS Business Formulas... a solution that helps you reduce completion time for different types of calculations. It allows you to create, test, and activate your own insurance formulas (see the use cases below). You can also version your formulas.

In short, you configure the formula input - an input argument, or a list of arguments, a data set (which can contain financial or non-financial data), then a formula expression. Next, you test the formula. Once finished, you activate the formula. Once active, the formula can be mapped to different calculation targets - such as a product, or a step in a customized underwriting process. Then, every time the formula is called, the Formula Engine handles all the various calculations for you and generates the desired outputs, in an accurate manner.

However, a rate is only valid for a set time period... Underwriters set the rates (pricing level) for a risk based on the underlying frequency and cost of claims, and other variables that might change their values. Sometimes rates are too cheap (don't cover claim costs) or too expensive (uncompetitive) so underwriters must replace them with an amended rate which will be charged from an effective date. Specifically for this case, formula versioning allows you to ensure that the correct rating is used for charging, for any risk.

Hence, with Formulas, the complexity of a granular pricing engine is decoupled from the digital quotation system, or at least diminished, and kept in a dedicated environment. This helps control the cost of development and reduces the maintenance and update effort for your portfolio of insurance products.

Bring Your Formulas To The Factory

The Insurance Product Factory solution provides access to your formulas and a testing functionality without leaving the context of your product, thus shortening the time from rating calculations to product launch.

In Innovation Studio, inside every product record:

  • The Premium Amount tab allows you to attach premium calculation formulas to the selected product, or its coverages (product items). For details, see the Premium Amount page.

  • The Underwriting tab allows you to attach scoring/ underwriting formulas to the selected product, or its coverages (product items). For details, see the Underwriting page.

  • The Test Calculations tab allows you to test your formulas based on different scenarios. For details, see the Test Calculations page.

Only one formula can be attached to a specified product, or coverage, at a time.

Check the following pages to find out about:

Demo Formulas

The Insurance Product Factory solution includes also an optional digital asset containing some demo formulas, so that you don't start the creation of your insurance formulas from scratch.

The following formulas are included:

  • Bankassurance_UW_Formula_Final

  • EmbededBankAssurancePremiumAmountFormula

  • HomeServiceBankAssurancePremiumAmountFormula

  • PA_Final_Premium

  • PropertyFormula

  • PropertyFormula_UW

You can read about them in the Demo Formulas page. A short description of the Import Formulas digital asset can be found in the Digital Assets page.

For more details about configuring formulas, see the Business Formulas documentation and this Create Formula For Risk Scoring tutorial.