There are several stakeholders affected by the decision of pricing and these will have to be considered in the strategy of pricing. Being in an industry driven by risk, actuaries were crucial in the traditional decisions of pricing. However, there is a control of several other parties as well. The team of channel management, within closer proximity of brokers and agents that have direct interaction with the customers, also has some stake in the process of pricing as well. Also, having direct implications with the bottom line of the company, there is huge consideration of finance. Finally, the team of senior management also has key involvement in the strategic decisions of pricing. Therefore, effective collaboration is of huge significance to keep each and every stakeholder in alignment, while ensuring that decisions of pricing reflect a consensus of cross functionality. With a compressed cycle of development to market pricing, the Medibankwill gain the ability of staying ahead in the company, while quickly responding to the changing dynamics of the market. Automating the execution of price will be enabling the Medibank for the acceleration of step, in order to move prices from the phase of development to the field and through testing (Lam 2014). Wherever the possibility lies, it is moving to optimize real time pricing further results in the empowerment of the insurer, for reaching maximum responsiveness and agility by the constant incorporation of market input within their decisions of pricing. Further ahead, for gaining competitive edge in the industry, Medibank will have to consider using the optimization of price. And pricing of insurance product is considerably more in comparison with just the process of rating. This also involves the use of tools like predictive analytical models, analysis of impact, and simulation of what-if scenario for increasing the accuracy of rating and improving the profits. The following components are essential for implementing the optimization of price (Leggat & Leggat 2002):
Landscape of competition: Optimization of price involves the crucial need to thoroughly understand the competition, buying preferences of customer, data of customer, and strategies of industry pricing.
Analytics processing: The recently available tools of analytics such as tools of dashboard assist Medibank for obtaining a better understanding and evaluation of crucial elements of risk.
Management of data: The quality perceived in data, specifically related to claims, customer, and historic policy, in combination with external availability of big data can be considered as the key for utilizing the optimization of price.
Predictive modelling: Medibank should use analytical tools for the creation of impact analysis and what- if scenarios in the prediction of future behaviour and improvement of underwriting performance.
Place and Distribution
The company has a number of options for using them as channels of distribution and place. Some of these include direct marketing, online portals via internet, banc assurance, insurance brokers, Trade Specific Agents, and insurance agents. Currently, the company involves a number of insurance agents and trade specific agents, while following direct marketing and enabling the use of online portals. Apart from individual portals of the company, the company can consider the use of independent portals. These clearly do not have an involvement of any functions of sales distribution, and need not make registration with the ARB of the GIA. Passive portals do not have an involvement in any functions of sales distribution that are as follows (Lovelock et al. 2014):
They do not tend to be providing advice on product or sale, but there is provision of static information of the product related to the respective insurers, without commenting upon features of product that include premiums not being deemed for the provision of advice on the product.
They do not have involvement in collecting proposals and premiums.
They do not consider issuing documents of policy in favour of the insurers.
The key base of setting fees should not be the premiums.
The insurer can further consider establishing and using personal lines of direct marketing for the different coverages. This will ensure that information about the insurance package is considered, and hence there will be online availability of insurance policy wording and insurance product quotations.