While many firms in insurance are hailing the potential of tech and artificial intelligence (AI) to transform the sector, there are fewer taking practical steps to achieve that vision.
InsuredHQ, whose chief executive Jon Davies will be taking part in a panel on generative AI at the Women in Insurance Summit 2024 in Auckland next February, is a firm that is walking the walk.
“At InsuredHQ, AI is not just a buzzword but a practical tool. We are exploring its use in augmenting the speed and quality of developers, automating routine tasks, enhancing decision-making, and offering predictive insights,” Davies told Insurance Business.
The Auckland-based firm provides a cloud-based software application for policy, claims, accounts, and document management systems for the insurance industry. It has traditionally had a focus on building insurance service capacity in emerging economies but has more recently pushed into mature markets such as Australia.
InsuredHQ is a key player in the recent move by Brisbane-based Ivory Insurance to operate as a general insurer in the Australian market, for example.
“This milestone is not just about meeting compliance standards; it reflects our unwavering commitment to maintaining the highest security and ethical standards for our partners and their customers,” said Davies.
Davies said the insurtech’s rigorous focus on security and controls was critical to the Australian Prudential Regulation Authority’s (APRA) decision to approve Ivory’s license application.
“Underneath the hood, it’s all powered via our Open APIs (application programming interface) and core administration engines,” he said.
Book your tickets today: Registration for the Women in Insurance Summit 2024 in Auckland is now open
Success stories like these don’t happen by accident.
At the height of the pandemic, InsuredHQ realised a paradigm shift was inevitable for the insurance industry and embarked on a strategic journey to disrupt the market by developing value-driven APIs – something that wasn’t easy at first.
“Initially, our API-driven implementations were modest, as mastering and documenting this new skill set was our primary focus,” said Davies.
But the hard work over many months is now coming to fruition just as the wider industry is realising the necessity for change in a sector that is often seen as a tech laggard.
“Now, in 2023, this decision is yielding significant results,” he said.
InsuredHQ’s API infrastructure has been instrumental in the development of a swathe of applications, including Pay How You Drive (PHYD) Car Insurance, mobile apps, embedded insurance offerings, and self-service portals.
“This is not merely about adding new services; it’s a complete redefinition of how insurance is delivered on a global scale,” said Davies.
“We’re proudly New Zealand-based - but with a vision of embracing a global identity, which means a shift towards a more interconnected and flexible insurance ecosystem.”
More firms are realising the scale of change on the horizon. A survey by Moody’s Analytics shows that nearly half of risk and compliance professionals at insurers are expecting new technologies such as AI to exert a transformative or major impact on the industry.
Davies agrees the practical applications of AI for insurance are still in their infancy.
“It’s the new digital user interface and though still in its nascent stage, AI’s potential to revolutionize our customers’ operations is immense,” he said.
Davies sees the API-driven approach as key in building new infrastructure to replace the paper-based, manual processes that have proved so profitable for many years and perhaps made the incentives to adopt new technology relatively weak until recent times.
“The implementation of APIs and a strong focus on security are fundamental steps in building an architecture that can support future technologies, such as newer Large Language Model (LLM) driven AI models. These foundational elements are critical for enabling the delivery of innovative services while ensuring compliance and security in an increasingly digital and regulated insurance landscape,” he said.
The potential for transformation in insurance is larger than in most other industries. A recent report from Accenture showed that the nature of work in insurance had the second-highest potential for change stemming from generative AI of 20 sectors surveyed.
Davies sees moving towards an API-centric model as more than just a technical upgrade.
“It’s a strategic move towards future readiness,” he said. “By establishing a solid API backbone, we’re paving the way for our customers to innovate on top of the platform as well as have the ability to quickly integrate new products and services into their existing tech stacks.”
The ability to move quickly is likely to become a hallmark of successful insurers as the tech revolution accelerates and evolves consumer expectations.
Davies can already see that near-future potential areas for development will include the integration of IoT (Internet of Things) into risk assessment and management, as well as stronger security against malicious actors amid public concerns around data security and the potential for fraud using AI.
“IoT devices can provide real-time data, enabling insurers to assess risks more accurately and even prevent losses,” he said. “Additionally, blockchain is poised to revolutionize claim processing and fraud detection.”
While the industry transformation due to AI is likely to be profound, he doesn’t expect the human element to become a casualty of the revolution.
“AI-driven analytics provide insights, but the final decision-making still rests with experienced professionals,” he said. “This ensures that personalized, human-centric service remains at the heart of our operations.”
InsuredHQ was recently named a FinTech Global Insurtech 100 company for 2023, making it the second year in a row for the firm to appear on the list.
Davies will be speaking at the upcoming Women in Insurance Summit 2024 in Auckland on February 27. The summit is sponsored by Deloitte. Book your tickets today.
