At the inaugural hx Live conference, hyperexponential’s co-founder and CEO, Amrit Santhirasenan, delved into the company’s innovative approach to artificial intelligence (AI), and opened up on AI’s role in revolutionising the insurance industry.
At hyperexponential, you can witness firsthand how cutting-edge technology is applied across different scales and paces and engaging in insightful discussions with industry leaders and practitioners. Santhirasenan’s unique background in software engineering and actuarial work provides a distinct perspective on the intersection of AI and insurance.
He pointed out that while we are at the beginning of a significant AI-driven technological revolution, hyperexponential avoids using buzzwords without substance. As the initial excitement around AI begins to settle, the insurance industry is starting to see the real potential of AI, and hyperexponential is keen to share its thoughts on this development.
Insurance plays a vital role in the world’s socioeconomic infrastructure, enabling clients to take risks in their endeavours, from homeownership to space exploration.
Given this impact, insurers have a responsibility to innovate and support societal advancement. At hyperexponential, improving pricing processes is a crucial mission, as it is the primary gateway for insurers to assess and admit risk.
Throughout his nearly two-decade career in the insurance industry, Santhirasenan has observed a growing gap between clients’ expectations and the value delivered by their coverage. Despite serving cutting-edge companies at the forefront of innovation, the insurance industry has been slow to leverage data-driven advancements.
Managing risk effectively is a significant challenge due to the inability to harness technology at the needed pace.
This issue boils down to the industry’s failure to utilise internal and external data efficiently. Siloed systems, outdated spreadsheets, and inadequate solutions limit the industry’s ability to leverage data in decision-making processes.
Companies like Floodflash and Gaia are pushing the boundaries of what’s possible with innovative approaches to IoT sensor data and customer experience. However, established players often fail to capitalise on these opportunities due to a lack of technological integration.
Santhirasenan emphasised that the quality of decisions in insurance depends on the quality and quantity of data and the depth of understanding derived from it.
At hyperexponential, AI promises to improve pricing decisions, which align with their framework for Pricing Decision Intelligence, encompassing data leverage, insights extraction, and decision-making.
Insurance is inherently about managing outliers, protecting against unforeseen events that are challenging to predict. Many lines of business are “fat-tailed,” meaning outlier events significantly impact portfolios. This makes reliance on historical data models difficult. Instead, judgemental inputs become crucial, giving companies with the best judgments a comparative advantage.
The industry is diverse, with varying risks requiring different techniques, technology, and underwriting workflows. hyperexponential’s platform, hx Renew, aims to be the most versatile and integratable, accommodating this diversity by tailoring AI’s role to different needs.
The insurance market is syndicated, dynamic, and competitive, with risks often shared among multiple carriers. This complexity poses challenges for utilising models effectively, especially when defining winning is difficult due to varying market dynamics and cooperation levels.
Despite these challenges, hyperexponential is optimistic about AI’s potential. They do not subscribe to the notion of completely automated underwriting for complex risks.
Instead, they see AI as an enabler of significant productivity gains by automating non-value-added tasks, allowing underwriters and actuaries to focus on high-value work.
AI’s conversational and multi-modal capabilities can enhance decision-making processes, enabling underwriters and actuaries to make more effective decisions daily. Additionally, AI can unlock vast amounts of untapped proprietary data, giving insurers a competitive edge by refining and utilising this data effectively.
hyperexponential believes that building the right platform is crucial for future success. Their platform, hx Renew, is designed to help insurers manage, capture, and leverage data seamlessly, supporting the development and deployment of AI use cases. By providing a comprehensive environment and integration capabilities, hx Renew empowers insurers to harness AI-driven possibilities, positioning themselves as market leaders.
Santhirasenan concluded that hyperexponential’s hx Renew platform offers innovative features and opportunities for insurers to simplify and accelerate data ingestion and decision-making processes.
This platform is just the beginning of what hyperexponential plans to offer, enabling insurers to harness the full potential of AI and drive industry evolution.
Read the full blog from hyperexponential here.
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