Kedar Gharpure shares an article on pricing and why you should think twice before lowering price to increase sales. 

Price is an important negotiation element in any B2B sale – and often made out to be a sticking point by the customers. Hence, it is no wonder that B2B companies often consider discounting their prices to win a deal or to secure more volume. However, most companies usually underestimate the incremental volume that they will need to sell to make up for the profits lost due to discounting. Not convinced? Read further…

Price has a disproportionate impact on EBIT

The impact of 1% price increase on EBIT vs. that of 1% volume increase is probably common knowledge by now. This insight was published as far back as 1992 in a HBR article based on financial data of c. 2500 companies. The analysis was further updated by McKinsey & Co. to include S&P 1500 companies in early 2000’s. Both analyses show that EBIT increase due to 1% price increase is more than 3 times of what can be achieved by selling 1% more volume. We took that analysis a step further and found that the impact of price on EBIT can be even more dramatic for a B2B company depending on the underlying business model.

For our analysis, we considered 3 archetypes: i) Trade Co.: Trades products or services for a small profit and has a significant proportion of variables costs; ii) Capex Co.: Works in capex intensive sectors and has a significant proportion of fixed costs; iii) Average Co.: a typical manufacturing company with a balance of fixed and variable costs.


Key points include:

  • Pushback
  • Volume
  • Recommended approach


Read the full article, Watch Out Before You Discount Price to Gain Volume, on LinkedIn. 

Kedar Gharpure shares an article that identifies key factors involved in B2B value-based pricing.

You have likely read articles about Value-Based Pricing (VBP) – after all, the concept has been around for several decades. However, our review of over 50 VBP articles from the top search results highlight that a) there is very little VBP literature geared towards B2B and b) no single article provides a comprehensive and actionable overview of VBP for B2B. 

In this article, we provide a complete overview of VBP, specifically for B2B companies.

First, we would encourage you to take this short quiz

Note down your answers as we would like you to re-take this quiz after you have read the article.

VBP is offering ‘value products’ i.e. cheaper products [True / False?]

VBP makes sense only for truly differentiated products [True / False?]

VBP can be defined only when developing / upgrading products [True / False?]

VBP is less effective when the competition is high [True / False?]

VBP is developed only by the Product and Marketing teams [ True / False?]

Once you have developed VBP you can use it with all your customers [ True / False?]

WHAT is Value-Based Pricing (VBP)?

Value-based pricing is an approach to determine the price of your product based on the value it provides to your customers. A very simple example is from the B2C world – a retailer will sell a bottle of water or a pack of crisps a higher price on the top of a mountain or in a tourist hot-spot, vs. its price in a local supermarket. In this example, the consumer will pay a premium for the convenience of buying the water or the crisps in those locations. We use this example to highlight an important aspect of VBP, that the value you provide to a customer is not just based on the specs and features of your product. After all, it is the same water that is being priced differently.


Key points include:

  • Why you should consider VBP
  • When you should develop VBP
  • Who should develop VBP


Read the full article, The 6Ws of Value-based Pricing for B2B, on


Ian Tidswell provides insight into the psychology of pricing.

Why are we often less than completely rational? Delving into psychology, one can think of the brain as having two types of circuits: system 1 and system 2 (Kahneman) or elephant and rider (Haidt).

The elephant (system 1) acts quickly and seemingly automatically, following a set of pre-programmed rules. It’s in control when you react to seeing a family member, catch a ball thrown at you, answer simple questions like 2+2 and make associations like “bread and b….”.  Practice and experience “trains” the elephant and results in situations like driving home from work and not quite knowing how you did it.

The rider (system 2) is our “executive thinking”. It’s logical, deliberate and slow, taking concentration and effort. It’s in control when you are engrossed in a movie, look for someone in a crowd, solve a problem, or do almost anything for the first time. When the rider is active you may lose track of what’s going on around you, letting the elephant get on with mundane activities.  However, the rider is lazy: if it thinks the elephant has things under control, it will go with the flow.


Key points include:

  • What pricing elephants are
  • How to get better pricing outcomes
  • Building a strong foundation for pricing decisions


Read the full article, Getting the Elephant to Smile, on 

This post from Nora Ghaoui takes a look at revenue models that work for smart products with a digital service.

Making a smart product needs more than adding an app. You need to cover the costs of the digital service or risk losing money. Which revenue model can you use? And why would anyone pay for this service?

The revenue model for a digital service needs to cover the costs of running it

Let’s consider the options for a new B2C product, for example a smart refrigerator. To be able to run the service, you need to add hardware and software to the product. The hardware costs and upfront software development costs can be covered by a higher price for the fridge. It has extra features, so a higher price is expected.

The digital service costs continue after the sale. They include providing feature and security updates, storing and analysing customer data, providing customer service, and so on. You can estimate for how long the service needs to keep working, then add X years of its costs to the purchase price.

If the service needs to keep working “indefinitely” then the incremental costs of maintaining it may exceeded the revenue you earned at the time of sale. If you do not balance these, the service will be loss-making for the company.

Using new sales to pay for the service

While sales are growing, you can cover the costs through new sales, subsidising the costs for earlier products that are still using the service. This delays the moment when the service becomes loss-making but does not prevent it. 

This “new sales to cover costs” model is why software makers keep making new versions of their products (e.g. MS Office, Windows). Once everyone has the product, you need to give them a reason to buy a new one. This model fails when the product is already good enough (e.g. Windows XP, then Windows 7), so software makers have switched to the subscription model (e.g. Office 365, Adobe Creative Suite).


Key points include:

  • A service that meets customer needs
  • Eight possible revenue models
  • The need to beat “free”

Read the full post, Which revenue model works for a smart product with a digital service?, on LinkedIn.


Ian Tidswell shares a guide on B2B price guidance, why it’s important, and what type of price guidance to give.  

(Sorry, this one’s a bit long. It’s also a key to superior B2B pricing)

Providing high-quality price guidance to your sales teams as they negotiate with customers can result in measurable profit increases. It really should be a core process. 

However, I’ve rarely seen clear quality-price guidance. Here are some key questions to ask:

  1.   Why is price guidance important?

When your company hires sales reps, how important are Excel skills? Do you test them for data-driven insights? I didn’t think so. Yet somehow pushing a pricing dashboard at them is going to get them to the optimal price. I think that’s misguided: better to give them simple guidance on prices that aligns with your strategic goals, backed up by robust approval processes for when the (inevitable) exceptions occur. 

Of course, an alternative approach is to have pricing decisions made by a ‘deal desk’. That’s a perfectly valid approach in many cases, although that sales process will feel very different.

  1.   What type of price guidance to give?

Using the price waterfall concept, there are two basic options:

  1.   Guidance on individual price adjustments, or
  2.   Guidance on specific price points. 

Price point based management almost always the better option when you have many products, and specifically the Pocket Price point. Trying to manage individual adjustments – like discounts and rebates – is too complex. They can be managed as part of annual contract or campaign processes. You just need to make them fit within the price guidance.


Key points include:

  • The price corridor
  • The price realization score
  • Pricing segmentation


Read the full article, Five steps to effective B2B price guidance, on LinkedIn.

David Burnie shares the second article in a series on the future of P&C insurance in Canada. 

In our first article outlining the future of P&C Insurance in Canada, we discussed how insurers have been and are continuing to invest in digital transformation agendas in an effort to reshape distribution and service in an industry that has been relatively slow to adopt modern business practices. We illustrated how the sector will evolve by focusing on how consumers (both individuals and small-medium enterprises) are beginning to interact differently with carriers and brokers to obtain new policies and have them serviced once those policies are in force.

In part two of our three-part series, we focus on how insurers are changing their underwriting and pricing practices to be more sophisticated, efficient, and profitable.

Underwriting and Pricing

From an underwriting, pricing, and risk selection perspective, two factors will impact risk assessment, pricing, and underwriting in the future:

Data collection and use

Increased use of automation and integration of technology

Data collection and use

Concurrent to the digital transformation wave is the rise of big data. As a result, many insurers are looking at their enterprise architecture and setting up data lakes in the hopes of realizing benefits down the road. The promise of these benefits is high as the variety, velocity, and volume of data continues to increase, and insurers create the infrastructure, capability, and culture to exploit this data. Historically, external data sources have been expensive in Canada relative to other geographies, such as the UK where much of the data used for selecting and pricing risks is free. Still, the provincial regulators and collaborative organizations such as the Centre for Study of Insurance Operations (CSIO) understand how valuable data can be to the industry. Data enables insurers to underwrite and price policies more effectively while serving customers better, improving combined ratios, and passing collective savings on to customers.


Key points include:

  • Intake & Triage
  • Risk Assessment and Pricing
  • Underwriting Processes


Read the full article, The Future of P&C Insurance in Canada: Part 2 – Underwriting and Pricing, on the


Kedar Gharpure shares a useful post and a practical guide to help companies choose their B2B pricing tools.


We reviewed over 50 B2B pricing tools, here is what we found

The B2B pricing tools landscape is getting increasingly crowded. Today, there are over 50 pricing products and solutions from the leading vendors alone. All vendors offer SaaS based tools that promise a rapid deployment. All vendors also offer analytics or machine learning or AI to deliver a superior pricing impact. So how do you cut through this complexity and choose the right pricing tool(s) for your organization?

Simplifying the B2B pricing tools landscape

We reviewed 50+ B2B pricing tools across 10+ leading vendors. To begin with, the tools often have overlapping features across the vendors. Further, the tools with similar features have ever so different names. Comparing the tools can overwhelm you, especially if you are the beginning of your B2B pricing tool discovery. However, to cut through the complexity, we have mapped all tools across 4 functional categories as illustrated below.

‘Price Management‘ tools are used to store and govern price policy, discounts and authorization matrix. ‘Configure-Price-Quote‘ tools are used to create and send a quote to prospects and customers. Depending on what a company sells, it may or may not need the ‘configuration’ module.

‘Price Optimization‘ and ‘Sales Growth‘ are a new breed of tools. They use advanced analytics or machine learning or AI to generate customer-product specific price recommendations. Depending on your business, you may need tools that deliver pricing recommendations either in real-time or just a few times a year.


Key points include:

  • The annual revenue of your business unit
  • Data across systems
  • 3rd party SaaS tool for ‘Price Management’ and/or ‘CPQ’


Read the full article, B2B Pricing Tools: Which One Is Right for You?, on


Umbrex is pleased to welcome James Wilton with  Monevate. James Wilton spent 3 years at McKinsey and Company, where he led the pricing service line at Fuel (McKinsey’s practice for startups), and recently left to found Monevate, a pricing strategy consulting firm focused on serving growth-stage companies.

He has ~15 years experience in consulting roles, with ~9 years focused on pricing strategy transformation and new product pricing. Prior to joining McKinsey, he served as the Head of Strategic Pricing at RELX Group, and led the pricing practice at SBI.

James lives in Saratoga Springs, NY with his wife and 2 (soon to be 3!) boys. He loves stand-up and sketch comedy (used to perform!), and trying new food and wines.

James would be keen to collaborate on any projects in compatible time zones (US and Europe) involving B2B/B2C pricing, packaging and value proposition.


Jason George provides a riveting read on cost and value, cunning tactics, and strategies from behind the scenes of manufacturers and pricing models.

Sleep tight

The choice of a mattress is fraught with implications, given how much of life is spent asleep and the infrequency of their purchase, not to mention the high price tag. Manufacturers are keenly aware of this and do their best to stoke the wallet-opening concerns of customers, using florid language to highlight coil counts or the latest in cushioning technology. Models receive names that evoke cruise ships or luxury sedans or vaguely European locales, and are further tagged with inscrutable indicators somehow related to quality.

Buyers are at a natural disadvantage as the innards of the product are invisible, leaving them to trust that the features advertised are present in the product and actually meaningful. Mattresses are difficult to transport and even harder to return, so the category does not lend itself to comparison shopping.

Behind the scenes, manufacturers have quietly consolidated and gained scale, rolling up the industry into a handful of mega-players, each with numerous offerings across the price spectrum. As the market matured these were increasingly sold in standalone shops dedicated solely to mattresses, featuring spartan décor, opaque pricing and a haggling experience not unlike that of a car dealership.

To top it off manufacturers adopted an especially cunning tactic to obscure costs and keep prices high. They created unique names for identical products and distributed them to exclusive sales outlets, ensuring that consumers would be unable to check prices at a competing store. Imagine if a Honda Accord was called by a different name at every dealership and you get the idea. Maximizing bewilderment and confusion led to a highly profitable business model for many years, such that mattress stores sprouted up across the United States, jammed into often marginal real estate.


Key points include:

  • Transparent fixed pricing
  • Profitability through complication and confusion
  • Authenticity as a core value


Read the full article, Coercing customers or creating true value, on


Umbrex is pleased to welcome Wayne Patten with Innovation Strategies. Wayne has over 30 years of experience in consulting to senior leadership in companies of all sizes. In 2000, Mr. Patten founded Innovation Strategies, LLC to focus on helping clients achieve significant organic growth and operational excellence. Prior to founding Innovation Strategies, he co-founded Prism Consulting International, and helped grow the firm to over 25 consultants. He also worked as a strategy consultant for Booz-Allen & Hamilton.

Mr. Patten has served clients in a wide range of industries, including industrial and building product manufacturers, financial services companies, and healthcare service providers. His expertise includes growth and technology strategy planning, strategy implementation, and business process redesign / re-engineering to improve operations, product development, and pricing. Prior to his consulting career, he worked as an electrical design engineer for a contractor to the U.S. Department of Defense.

Mr. Patten is married with three adult children and lives in Northern Virginia. He would welcome the opportunity to collaborate on projects where his expertise and experience can add value to clients large or small.


Ian Tidswell provides insight into the strange pricing practices fueled by loyalty programs, credit card programs, fees, and customer perception of value. 

Utpal Dholakia always has interesting posts on pricing.  This one got me thinking about the strange way that buying a coffee can result in wealth transfer to an airline.  

Airlines make a lot of money off of their loyalty programs (often all of their profit). 71% of those miles are purchased, many by banks for their credit card programs.  This is strange.

Credit card payment processing is not a very economically efficient market: there’s close to a duopoly with MasterCard and Visa (80% market share).  That, along with the scale efficiencies, consumer switching costs, and merchant risk aversion (more on this below) mean they can charge high fees to merchants, capturing huge value.  (Capturing rather than creating IMHO, since this is rent-seeking behavior. It’s a high-margin, commodity business. MasterCard net profit margin is 50%!)

MasterCard and Visa member banks then compete with each other in a profitable but near-commodity market. One way they compete is on price: sharing some of the fees they earn via the processing companies with consumers. They could do this with a simple cash-back scheme or other reward programs, but it turns out that airline loyalty points work well since many people value them higher than their actual worth. It’s basically a parallel currency with a highly variable exchange rate to valuable services. An exchange rate the airline controls.


Key points include:

  • The true value of reward programs
  • The true cost of reward points
  • The rentier economy


Read the full post, The strange case of a Cup of Coffee, Credit Cards and Costa Rica vacations, and access links on the subject on


Umbrex is pleased to welcome Kedar Gharpure with B2B Growth Consulting.  Kedar is a former McKinsey & Co. project manager with over 10 years experience in growth strategy, commercial transformation and digital at B2B companies across a variety of sectors globally. Kedar has supported both Fortune 250 and PE owned B2B companies across a range of sectors such as industrial goods, specialty chemicals, hi-tech and business servies to craft their growth strategy and drive sales and margin growth.

He has particular expertise across several commercial topics including Pricing, Key Account Management, Go-to-Market model, Channel Strategy and Sales Force Effectiveness. Kedar holds a degree in Mechanical Engineering from University of Mumbai and a MBA from London Business School. He is British, based in London and loves to find time for go-kart racing.


Barry Horwitz shares a post to help you define and improve your business model. 

According to Mark Johnson, co-founder of Innosight, a business model is simply this: “The way a business creates and delivers value for a customer while also capturing value for itself in a repeatable way.” It’s a straightforward concept, but important enough that academics and consultants alike talk about it frequently.

For example, in my work with entrepreneurs — both established and “would-be” (i.e., students at the Questrom School of Business at Boston University) — I often leverage something called the “Business Model Canvas,” created by training firm Strategyzer. This framework is useful in ensuring that all the relevant elements and their interconnections are considered before going to market.

The interconnections are particularly critical, since changes in one can wreak havoc on the rest.

Consider digital music. Apple’s iTunes disrupted the music industry by enabling downloads of individual songs at only 99c each, upending a once fabulously profitable record industry and forever changing how music was purchased. But it wasn’t long after that when the next tech innovation arrived — cellular broadband — which allowed for music streaming (via Spotify and others), changing the game once again, as music ownership was eclipsed by an unlimited library and a monthly subscription.

Note that renting rather than owning is not, in itself, new; people have had the choice of leasing cars instead of buying them for decades, as one example. But the application of the “rent rather than own” business model to music, was… enough to disrupt an entire industry.


Key points include:

  • Customer segmentation
  • Pricing and cost
  • Changing the business model


Read the full article, What’s Your Business Model, on



Ian Tidswell and Norbert Paddags co-wrote this article on what bankers should learn about innovative pricing approaches to increase profitability.

Pricing – What private bankers can learn from Porsche

Banks have learned a lot from industries like the automotive sector in the past, but they still have some catching up to do. This includes innovative pricing approaches to increase profitability.

Imagine you want to buy a sports car, for example a Porsche. Maybe a 911. You call a dealer and want some information, including the price, because you can’t find it on the Internet. The dealer does not answer the question, but kindly invites you to an appointment and you discuss for two hours what you need the car for and what it should do. In a second appointment you will then receive a suggestion for the 911 and take a short test drive. They ask whether there are alternatives, for example an SUV for the family or a car for long trips or an entry-level model. All this is denied by the dealer, but he praises the different color and engine variants. Ultimately, you’re talking about the price, which is $ 130,000 on the first offer. You ask politely, almost shyly, whether something could be done. And the seller replies without hesitation that he can leave you EUR 15,000.

Pricing: Porsche vs. Private banking

Is this a completely absurd story? In the automotive industry for sure, but is it a good – admittedly exaggerated – description of the situation in private banking? Comparisons of this kind are never perfect, but they are often illuminating. One difference, of course, is that the sports car is a highly emotional product and the private banking service is a less than inspiring service. Nevertheless, the target groups are similar and the costs of a private banking mandate over the term of the customer relationship quickly reach the price of a Porsche. Three aspects of the “absurd” story need to be discussed for private banking:

(Still) lack of price transparency: The private banking customer (still) has to make a significant effort to get an overview of the usual market conditions, as these are not disclosed by the institutions. Typically, the customer only receives a specific offer in the second interview. Ie although the services are essentially similar, the pricing is discretionary. Even if this can be a very comfortable situation from the perspective of the private banker, it is questionable how long it will last.


Key points include:

  • Why pricing is important
  • Brief excursus on pricing theory
  • Pricing approaches or what needs to be done?


Read the full post, Pricing – What private bankers can learn from Porsche, on



Robbie Kellman Baxter shares key points on developing tiered pricing options that elicit a positive reaction from subscription-based customers. 

Netflix, one of the largest and most successful subscription companies in the world, has among the simplest of business models. There’s a one-time, short, free trial and then the only option is to subscribe.* They only offer a few subscription options, are very limited in the partnerships they utilize and generally stay away from bundling their products with those of other organizations. You don’t get a free toaster with your Netflix subscription and you don’t get a free Netflix subscription with your toaster. The clean model makes it easy to track subscriber behavior and understand how people value their offering. After all, if you only subscribed to get the toaster, you’re going to behave differently than if you intended to make Netflix content part of your new normal. In contrast, news organizations have a huge range of offers. They bundle with other content providers–music, video and other news organizations. They have dynamic paywalls, offering more free articles to some people than others. And they have dynamic pricing, trying to optimize for revenue on every transaction and every relationship.

Tactics around dynamic pricing, while effective in the short term, don’t always make sense from a Membership Economy’s long-term perspective, and focus on lifetime customer value (LCV). For example, it’s accepted wisdom that long-time subscribers are less likely to cancel or complain about pricing. So there’s a temptation to give new customers better pricing than loyal ones. To me, that logic seems like “our best customers are dumb enough to trust us, so we can charge them more than we charge new customers.” In a world of increasing transparency, where it’s easier than ever before to quickly assess what any product is worth and the best available price, this is dangerous.


Points covered in this article include: 

  • Dynamic pricing
  • Gaining the trust of the subscriber
  • Managing internal systems


Read the full article, How to optimize tiered pricing options for a subscription, on LinkedIn.


Umbrex is pleased to welcome Sara Zanichelli. Sara has 10+ years of strategy consulting experience, as core member of Financial Services Practice at BCG and previously at Simon-Kucher & Partners (recognized as world leader in pricing consultancy). After BCG, she held managerial roles in ING Bank (innovative digital bank, agile pioneer), being responsible for customer value management (marketing, pricing, customer intelligence, complains) and later serving as tribe leader for lending products.

Sara spent the last 6 months in Qatar, working on digital strategy and transformation projects at Oliver Wyman. She is in the process of relocating to Singapore with her husband.

Sara is happy to collaborate on digital transformation and marketing projects.


Eric Hiller recently published the first article in a series for Industry Week. This week, the article  focuses on how an executive (and other people who are not cost experts) can understand what the cost management team is communicating.

We have all been in a meeting where miscommunication happens. One of the biggest challenges when dealing with analytics in business is that the more powerful the analytics, the harder it is to explain to other people not involved directly in the analyzing. Exactly how the analytics works and why the results should be trusted by our colleagues and leadership is a challenge. The same is true with product (or service) cost management—specifically, when using what are commonly called “should-cost models”, (models for estimating the cost of a product or service).

A big part of the communication problem is that there is not just one type of cost model. Cost management is a broad field with a variety of methodologies to address the almost infinite world of situations for which one wants to know the cost of manufacture or service delivery. Even if an executive has some understanding of one particular cost-modeling technique, it can often be confusing when the analytics team uses different technique.


Questions answered in this article include:

  • At what level of the BoM (bill and material) or WBS (work breakdown structure) is the object or service being costed?
  • Does the cost model focus on the object or service, or does it focus on the process?
  • What analytical approach is used in the cost model? 


Read the full article, 5 Questions for Better Cost Management Discussions, on the Industry Week website. 


Umbrex is pleased to welcome Travis McElveen with Matterhorn Advisors. Travis McElveen spent nearly 4 years at McKinsey & Company in a variety of roles, including Engagement Manager, where he served companies in the transportation, aerospace, and basic materials industries across multiple functions, including operations, pricing, advanced analytics, and growth strategy.  Additionally, Travis has extensive experience serving organizations in the federal and non-profit sectors.

After starting his career at McKinsey & Company as a Business Analyst, Travis joined the US Navy as a pilot, ultimately becoming a Tailhook qualified aviator landing on aircraft carriers. Travis rejoined McKinsey in the Charlotte office following his military service.

He lives in Charlotte, NC, with his wife and two children and is an avid skier and outdoorsman.


The Internet of Things has caused much disruption in the retail industry where only the most agile and innovative survive and thrive. Carlos Castelan’s company blog explains how to transform or build businesses to match customer expectations.

There’s a great line courtesy of Albert Einstein where he was quoted as saying, ‘If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask… for once I know the proper question, I could solve the problem in less than five minutes.’ Though we (thankfully) do not have a problem that our lives depend on today, the line epitomizes the spirit of reflection that many people take at the start of the year to make changes for the coming 12 months.


Areas covered in this article include:

  • Purpose
  • Personalized experience
  • Pricing and promotion optimization
  • Process transformation


Read the full article, The Retail Leaders’ Agenda for 2020, on the Navio Group website.



Ian Tidswell provides an infographic that provides the details of the key 6 steps to creating and capturing value in MedTech, from offer design through market access and reimbursement approval to new product transitions.

Success in the Medical Technology industry requires constant innovation. However, capturing a fair share of the value (pricing) from that innovation throughout the product life cycle is especially challenging given multiple market access hurdles, constrained healthcare budgets and diverse stakeholders.


The steps illustrated include:

  • Pre-launch – market access with value recognized
  • Communicating the values 
  • Gaining effective value access
  • Segment and target buyers
  • Incentives align channel
  • In-market – value delivered and captured


View the detailed infographic on the Een Consulting website. 



Pieter Lekkerkerk describes current alternative pricing models making inroads in car insurance in the US: pay-per-mile and driving-score based pricing. 


In the last few decades car insurance premiums have traditionally been set based on o a risk assessment questionnaire (typically covering the car, its usage, the driver and her/his background among others), enriched with data from e.g., credit bureaus and the Department of Motor Vehicles (on e.g. traffic fines). In the wave that saw the disruption of many business models in the past few years two main alternative pricing models have emerged:

  • Pay-per-use: A rate per mile or minute driven, sometimes complemented by a fixed charge (e.g., MetroMile)
  • Driving score-based rates: Tariff is based on the risk implicit in the driving behavior of the driver (speeding, sharp braking etc.)


Areas covered in this article include:

  • The relevance of these models in the Brazilian market 
  • The impact of alternative pricing models in the US
  • Key differences between the US and Brazil in claim
  • Winning models for Brazil

Read the full article, Alternative Pricing Models in Car Insurance, on the Mirow and Co. website.


Jason George tackles the intricacies of tariffs and taxes and discusses the potential of a fair system that takes into account concentrated benefits and diffuse costs while dealing with the interests of the few vs. the masses.

Observers who dig even a little into government policy in areas like tariffs or taxes might note some peculiar features. Regulations are often crafted to provide benefits to a favored constituency, while the corresponding costs are borne by the broader population in some opaque way that individuals can’t discern. As a result everyone ends up paying slightly more for healthcare, or cars, or chocolate bars, while the folks who sell those things get some economic protection.


Topics covered include:

-The handshake problem

-Hidden group costs

-The cumulative effect of multiple narrow interests


Read the full article, The Collective Action Problem and True costs, on Jason’s website.