Building a pricing system from a spreadsheet
Have you got an Excel pricing model that you would love to turn into a system? Has the complexity of building a system inhibited progress in your company?
This is not an uncommon challenge in the insurance environment, and this paper will explore the new technology that makes it easy to convert these models to the cloud and make them accessible and massively scalable.
The common assumption is that coding languages like Java and Python are the most popular in the world today, and they are – unless you include Excel. Then the numbers alter dramatically – there are an estimated 800 mil Excel users worldwide, and only 26mil software developers who are already stretched too thin.
Spreadsheets are frequently used for pricing
The widespread use of spreadsheets for pricing insurance has contributed to a business environment that is heavily dependent on spreadsheet results without due consideration for the need to connect these models to core operating systems. The reason for this adoption is that the user experience is simple and visual, and spreadsheet skills can be easily acquired. This has led to significant adoption, making spreadsheets the most used tool for insurance underwriters, actuaries and analysts.
Spreadsheets allow complex calculations to be built quickly in a flexible coding environment while simultaneously ensuring common calculations can be done repeatedly.
Spreadsheet models need to go digital
It is time for spreadsheets to move to the cloud. Data collection and the models used for analysis have all migrated to new cloud-based systems. The digital environment is rich with features that include dashboards, databases and seamlessly integrated AI and automation. This digitisation has reduced operational and security risks and accelerated the ROI and profits seen within the insurance sector.
Transparency and collaboration are huge benefits of a cloud-based digital pricing model. Spreadsheets are valuable to companies due to the critical business logic built into them.
The future of pricing systems with embedded Excel models
Optalitix maintains the ease with which Excel models can now be converted and the number of Excel models in existence requires a new age of system design that positions Excel modelers at the core of no-code systems. While coded pricing systems are still needed for complex connections, the heart of these systems (the calculations and IP stored in these models) will be adopted by the Excel modelers and converted using Optalitix Models.
This approach will significantly reduce the bottlenecks currently in creating pricing systems, leading to faster system development, lower costs and more imaginative system use cases. The impact on companies will be similarly significant, with early adopters rapidly testing, publishing, and scaling new systems using the IP their staff have currently locked on their desktops.