Dynamic Pricing in a Fast-Changing World
Lars Schmid, Director of Finance, Allianz Ayudhya
This paper uses the COVID insurance provided in Thailand from the early months in 2020 until the middle of 2021 as an anchor point to discuss the merits of dynamic pricing in insurance. These insurance products started as a promising way to support the local population and were hugely popular but also profitable for the participating companies at first. This changed in 2021 when Thailand’s situation turned around to worsen significantly and at the time of writing the first companies are trying to cancel existing policies to avoid severe losses. After discussing the COVID-19 products in Thailand, this paper looks at dynamic pricing and how it could be used when the situation is fast moving and challenging for traditional pricing approaches to be applied.