Pricing is one of the most consequential functions in insurance — and one of the least visible. Claims gets the headlines. Underwriting gets the scrutiny. But pricing sits quietly underneath both, shaping profitability across millions of policies through assumptions that can go stale faster than anyone realizes.

For most carriers, the mechanics of pricing haven’t kept pace with how quickly the world is changing. A rate change approved today might not be live in the market for weeks or months, trapped behind policy administration release cycles that were never designed for the kind of volatility the industry is now dealing with — social inflation, rising repair costs, tariff pressure, and catastrophe losses that keep defying historical patterns.

Kumarappan Sundaram has spent years working through these problems with P&C carriers as a Managing Director at PwC. He brings a technology practitioner’s perspective to a function that often gets treated as a back-office infrastructure problem rather than a strategic capability. He’s measured about where AI fits — distinguishing what is already delivering clear value from what remains genuinely unproven — and direct about the sequencing mistakes carriers make when they try to modernize pricing before the foundation is in place.

His practical advice is worth taking seriously: Before reaching for advanced analytics or AI, measure how long it actually takes to get an approved rate change into the market. Most carriers have never done that math. The number, he suggests, tends to be illuminating.

Read the full interview to find out why decoupling rating logic from the core policy system is the starting point most carriers skip, how modern pricing platforms are beginning to close the long-standing gap between pricing and underwriting, and where AI can genuinely change the work.

Paul Carroll, Editor-in-chief of Insurance Thought Leadership.

Pricing gets far less attention than claims or underwriting, yet it is important. How is the pricing function being modernized in insurance? And how should it be?

Kumarappan Sundaram, Managing Director, PwC US

Pricing gets less attention partly because a lot of the work is infrastructure: platforms, data flows and deployment processes. It is not a front-office workflow that a new tool can visibly transform.

Modernization can be uneven. Personal lines are well on their way. Commercial lines are earlier in the journey and still rely heavily on underwriter judgment and rating engines embedded in policy administration systems.

How pricing should be modernized can largely be a question of sequence. The foundation comes first: decoupling rating from the policy admin system. At the moment, actuaries produce pricing logic, which they hand to IT, which embeds the logic in a rating engine that sits within a policy admin system. So, making a change to the pricing logic means waiting for a new release of the policy admin system. If you decouple, you can make changes to ratings as and when you want.

Once you’ve decoupled, you should build reliable data flows and establish clear governance.

You can then go to the next level of capabilities, like advanced analytics and AI. Let’s say you have a $10 billion book. You’re considering changing a particular rate factor from X to Y, maybe related to driver age. Advanced analytics can help you understand the impact of the rate change on the whole book. The actuaries can then decide whether to make that rate change. Carriers can help deploy and monitor pricing changes quickly and safely.

Paul Carroll

From a technology standpoint, what are the most important shifts in P&C pricing and rating?