Insurers can have a difficult time pricing their policies. We sat down with Samuel Falmagne, CEO of Akur8, to talk about insurance pricing. He emphasizes the importance of revolutionising insurance pricing by leveraging transparent AI – allowing insurance carriers to significantly improve profits and to grow faster – while reinforcing regulatory compliance and models governance.

Samuel, how can machine learning help insurers and their actuaries?

Machine learning is quickly entering the insurance space, and actuaries can benefit greatly from its adoption in pricing processes. Expanding the use and purpose of machine learning analysis will open exciting new opportunities. Adopting an easy-to-use platform for machine learning will be key in allowing actuaries to use machine learning to its fullest potential.

An analyst will not frequently use machine learning techniques if they need to set up a codebase from scratch for every application and maintain the codebase across multiple platform updates. Machine learning algorithms should be as accessible to actuaries as spreadsheets. The proper application of machine learning will significantly change a team’s work experience, but it will not dilute the importance of industry knowledge. Machine learning algorithms will quickly provide data-driven insights so users can apply their industry knowledge to the results and drive company strategy. Machine learning is no longer just a forward-looking buzzword – it is now ready to be broadly applied to pricing analysis.

How can insurers use this to create more value?

The pressure on insurance carriers has strongly increased over the past few years: rising competitive pressure from direct insurers and new entrants like insurtechs or tech giants like the GAFAs, with high inflation putting a drain on their profitability. These trends have only been accentuated by the Covid-19 crisis, increasing the urge for best-in-class rate-making capabilities.

Insurers that will create the most value in the next decade are those that strongly and sustainably commit to rate-making and underwriting excellence, in order to build a self-perpetuating competitive advantage. For insurers, rate-making excellence, in terms of strategy and capabilities, is more critical than ever to generate value.

At Akur8, we believe that more and more insurers will be leveraging AI-based solutions to improve their rate-making capabilities, as transparency of AI approaches becomes the norm. AI-based solutions can enable insurers to boost their risk assessment and pricing capabilities, fuelling market differentiation and anchoring their competitive advantage

What can Akur8 do for insurers looking to upgrade their pricing game?

Akur8 is revolutionizing insurance pricing with Transparent AI, boosting insurers’ pricing capabilities with unprecedented speed and accuracy across the pricing process without compromising on auditability or control. Our modular pricing platform automates technical and commercial premium modelling. It empowers insurers to compute adjusted and accurate rates in line with their commercial strategy while making a substantial impact on their business and maintaining absolute control of the models created, as required by regulators worldwide. Insurers working with Akur8 have found that they spend significantly less time on modelling: time spent modelling is reduced by a factor 10, while the models’ predictive power is increased by 10% and loss ratio improvement potential is boosted by 2-4%.

Who is Akur8?

Akur8 won an ITC DIAmond award at ITC DIA Europe in Barcelona! The Akur8 adventure was born from the conviction that the power of AI can transform insurance pricing and empower actuaries to make better decisions, faster, if applied with absolute transparency. This conviction was first developed by Akur8’s R&D team, combining actuarial and data science backgrounds, and guided them along the 4-year R&D journey that led to the founding of Akur8 in 2018. The solution was launched in 2019 and since then Akur8 has acquired more than 100 customers across 5 continents, including global leaders AXA, Generali and Munich Re, specialty insurers Canopius and Tokio Marine Kiln, as well as insurtechs Wakam and wefox. More than 900 actuaries now use Akur8 on a daily basis to build their pricing models across personal and commercial P&C and health lines. Akur8’s strategic partnerships include Milliman, Guidewire, Duck Creek and Sapiens.