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Dynamic Pricing Accelerator
Take control of your pricing platform with TIBCO's Dynamic Pricing Accelerator. Applicable to insurance, retail, travel, or any industry where personalized pricing would be an advantage. Transform into an algorithmic business by deploying personalized pricing and propensity models that you build and manage to gain advantage over competitors while using industry-standard modelling languages. Hot deploy these models and watch the results in real-time with the TIBCO Insight Platform.
TIBCO Spotfire® TIBCO® Streaming
TIBCO Spotfire Analyst
TIBCO Spotfire Server
TIBCO Streaming Artifact Management Server
TIBCO Component Exchange License
The Dynamic Pricing Accelerator manages the full insight-to-action cycle for Algorithmic Pricing. The insight component allow historical quote data wrangling and analysis, resulting in a propensity model. Several common models are included. The model is then deployed to the action component, which operates in real-time on submitted quote requests. Each quote is scored, and a price and commission profile computed which is fully customized for each individual customer. Overall health of the system and model effectiveness may be evaluated on a real-time dashboard.
The source distribution contains a Quick Start guide in PDF and MD format. For hybrid cloud deployment, view the Dynamic Pricing Accelerator Getting Started in the Cloud guide on TIBCO Community for setup instructions.
The list of Supported Versions represents the TIBCO product versions that were used to build the currently released version of this accelerator. We expect newer versions of the TIBCO products will also work. Please see the wiki page for the accelerator for possible further details around product versions.
Accelerators are provided as fast start templates and design pattern examples and are supported as delivered. Please join the Community to discuss the use and implementation of the Dynamic Pricing Accelerator.
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Dynamic Pricing Accelerator
The Dynamic Pricing Accelerator illustrates a reference architecture that shows how Predictive Analytics and Streaming Analytics can help businesses move towards an algorithmic business model. It provides a platform to improve competitiveness with bespoke pricing models and reduces reliance on expensive black-box software. The platform evaluates the model effectiveness in real-time giving the opportunity to take immediate action in response to changing market conditions.
Also see this article on the TIBCO Blog by Richard Price explaining the concept of the Algorithmic Insurer:
(since the last release of Dynamic Pricing Accelerator 2.1.0)
November 4, 2021, release of Dynamic Pricing Accelerator 2.2.0
- Streamlined product requirements to remove requirement for FTL and eFTL
- Changed model execution for hybrid cloud architecture to use PMML to remove dependency on TERR
- Upgraded to latest Spotfire Server 11.5.0, Spotfire Analyst 11.5.0, and TIBCO Streaming 10.6.2
- Added new features to DXP for model design and development
- Added new TIBCO ModelOps deployment option
The Dynamic Pricing Accelerator is illustrated with a use case from the Insurance market. However the principles applied are valid across a range of business domains.
Historically, the insurance software market has been dominated by a handful of specialist vendors whose products can be both expensive to deploy and difficult to customize without the involvement of the IT department.
Operated by IT departments largely as “black box” solutions, leading insurance firms are effectively all using the same algorithms to assess and price risk, with little opportunity to fine tune the logic used or to do so quickly in order to, for example, react to market trends and legislative changes, or differentiate insurance products for competitive advantage.
Beyond that, the data analytics and algorithms applied by most legacy applications are, for the most part, basic and well behind the technology curve. The majority are designed to work purely with static data and are unable to handle multiple real-time data streams, or apply advanced predictive models to better understand and forecast possible risk. Added to which the black boxes are failing to add more advanced analytical capabilities, like those available through statistical languages such as R, which is rapidly becoming the tool of choice for data scientists.
Lastly, legacy insurance applications can be difficult to integrate, particularly into a modern IT fabric spanning a mix of public and private cloud, as well as on-premise platforms. That, in turn, creates barriers when it comes to the automation and streamlining of business processes—a growing requirement as companies move towards wider digital transformation.
Benefits and Business Value
By unlocking the algorithms from the proprietary software, this opens up the possibility of gaining business advantage over competitors. Moving beyond the black box approach allows insurers to leverage human capital in the form of their data scientists to come up with new and innovative models. Providing the right tools for the job helps accomplish this goal. The Insurance Pricing Accelerator is a set of tools that allow insurers to build their own pricing and propensity models, evaluate their effectiveness, and hot deploy them into a running system that will then execute against them in real-time. Feedback from this execution can be rapidly fed back in to the modelling process and the models can be re-evaluated and updated more frequently.
The accelerator demonstrates the insight-to-action loop for insurance pricing prediction. The analyst can use the Spotfire DXP to model the propensity for customers to accept or reject an insurance offer based on a number of customer properties. Once the analysis is completed, the model can be hot deployed to StreamBase so that quote requests can be scored in real-time.
A simulator can then be run to send through a series of quote requests. Each request is scored against the model for propensity. Based on this, a commission and discount are computed based on the probability of acceptance, and a premium is generated. This information is combined together and an overall quote offer is produced and returned to the customer. The simulator then acts as the customer and either accepts or rejects the offer. All this information is stored in Live Datamart and a real-time dashboard provides summary statistics about what’s happening as quotes flow through the system.
Historical data is retained as well as the outcome of the quote. This data is fed back into a rebasing model, which refines the predictive capability and automatically updates and deploys back into the engine.
At the heart of the accelerator are the Event Manager and Analytics Server. They form the principle components of an analysis-action feedback loop. The Event Manager are implemented using TIBCO Streaming and TIBCO Enterprise Runtime for R (TERR). The Analytics Server is implemented using TIBCO Spotfire and TERR.
As quote requests flow through the Event Manager, they are scored and published to a real-time datamart implemented using Live Datamart and displayed on a real-time dashboard implemented using both LiveView Web and Spotfire.
Once scored the Event Manager returns the result back to the calling application which presents the quote to the customer who then accepts or rejects the offer. The Event Manager also retains a history of the quotes and results. On a configurable interval it invokes a rebasing model which then recalculates the predictive model based on the previous set of results. This new model is then deployed into the system.
|TIBCO Spotfire Analyst||11.5.0|
|TIBCO Spotfire Server||11.5.0|
|TIBCO Streaming Artifact Management Server||1.6.2|
Documentation Quick Start Guide is available by downloading the full Accelerator source distribution package from here. To get started with the TIBCO ModelOps architecture, view the Dynamic Pricing Accelerator Getting Started with TIBCO ModelOps guide. To get started with the hybrid cloud architecture, view the Dynamic Pricing Accelerator Getting Started in the Cloud guide on TIBCO Community and the distribution package can be downloaded from here. The license file for this component is here.