Electronic Chat with Anne-Laure Klein, COO, Akur8
Laura Mazzuca Toops | March 09, 2021
Anne-Laure Klein is CCO of Akur8, a Paris-based SaaS insurtech startup specializing in insurance pricing optimization using its proprietary product, Transparent AI.
Akur8’s exclusive machine learning algorithms automate rate making while preserving control and transparency, enabling insurers to replace the manual processes of legacy solutions and the need to build and maintain large code-bases through custom R/Python developments, while maintaining an output that is understandable and auditable. Akur8’s solution allows insurers to complete the modeling process 10 times faster, improving model performance, processing more types and volume of data, and allowing efficient model governance and collaboration with business units.
Please tell us about how Akur8 got started and its benefits for insurers.
The Akur8 adventure started four years ago, when our team of actuaries and data scientists started exploring how AI and machine learning algorithms could improve the traditional insurance pricing process, which can be very manual and time-consuming.
Akur8’s solution has been specifically developed for P&C and health insurers and is the only solution on the market to combine the best of two worlds: actuarial science and data science. We leverage unique Transparent AI to automate insurance pricing modeling, while keeping full transparency and control over the models created.
As such, our solution brings speed, performance, and transparency to rate modeling. In terms of speed, modeling time is dramatically decreased, generally by 10x. As for performance, predictive power of models is significantly enhanced. And last, outputs generated with Akur8 are fully transparent, with a robust process allowing for seamless collaboration, better oversight, and improved governance. This enables insurers to accelerate time-to-market, increase their competitive edge while reinforcing the productivity and agility of their teams.
As a result, insurers using our solution can provide new products more quickly to their customers, and leverage the level of transparency of Akur8 to build more precise rate structures.
How does your recent partnership with Duck Creek expand Akur8’s capabilities?
Our partnership with Duck Creek is a massive accelerator for us in the U.S. There was a great technological fit with the Duck Creek suite, especially with Duck Creek rating, their rating engine that modernizes insurers’ rating functions. With this partnership, we are combining our forces and further boosting our value proposition. We are bringing a substantial value-add to P&C insurers, with an integrated and end-to-end rate-making solution, from data to production, that can enable their digital transformations.
How did you personally get started in insurtech, and how did you get involved with Akur8?
The common denominator of my career has been digital and data transformation across various sectors. I started my career in strategy consulting before moving to the corporate world where I held various leadership positions in global strategy, digital and data transformation, and digital and tech partnerships.
I joined the Akur8 adventure to be a force of transformation in the insurance space and specifically in insurance pricing. What we are doing is transforming an extremely core process of insurance with a very advanced technology – Transparent AI - that insurers can leverage at scale, in production. Insurance pricing is typically not the most insurtech-crowded space, it’s much less touched by radical innovations than other areas such as fraud detection or claims automation. The innovation that we are bringing to insurers is extremely exciting!
What are the specific tech tools that Akur8 uses for its services?
Akur8 has developed a unique AI-based insurance pricing solution. We have developed proprietary algorithms leveraging Machine Learning, to automate the generation of pricing models while keeping complete control over the models created. This is what we call Transparent AI.
Akur8 is a SaaS solution, cloud-based, so there is no IT integration needed at all, it is basically plug and play.
Where do you think the global insurtech market is headed in the next year?
The insurtech market has demonstrated very strong traction in the past few years.
On the one hand, B2C insurtechs stories are piling up with Lemonade reaching one million customers, and are attracting significant investments, with Root’s IPO or Hippo raising $350 million last year to quote a few examples. These companies are raising the bar, defining entirely new standards in customer interactions.
On the other hand, B2B insurtechs are also developing very fast all the more so as they become essential to bolster carriers’ capabilities and equip them with the best-in-class tools -- from new way to interact with customers through chatbots, to new ways of collecting and harnessing data to the reshaping of core processes and so on.
I very strongly believe that these high-growth trends, both for the B2C and B2B insurtech markets will continue to accelerate in the next year.
How has the COVID pandemic impacted the company’s growth trajectory?
The COVID pandemic has been an accelerator of change for the insurance industry and for us as an insurance pricing automation solution provider.
COVID-19 has induced changes in traditional risk profiles and behaviors of consumers: generalized remote working, virtually no commuting and very little driving, economic duress for a tremendous number of households and businesses, just to mention a few. Some of these changes are profound and will probably last, including the changes in working, commuting, and driving patterns.
Insurers have had to adapt and react fast, to adjust the prices of their policies and take into account factors such as reduction in auto claims, resulting from the reduction in number of miles driven for instance. Many U.S. insurers redistributed value to policyholders in various ways to ensure retention and acquisition.
All of these actions demanded strong and unprecedented reactivity from pricing teams. The speed and depth of insurers’ reactions contrasted with the usual relatively slow pace of change in the industry. Rate making teams were highly solicited and the need for faster, reactive, analytics-native tools only grew stronger. The pandemic shed decisive light on the benefits of AI and ML for processes as core as rate making.
At Akur8, our clients shifted to a more intense use of our solution, the number of models computed on our platform tripled as insurers needed to run what-if scenarios for risk analysis and re-pricing purposes. We’re very humbled to have supported them as they had to go through such a tidal wave.
What emerging tech tools are you most excited about?
I think the future of AI in the insurance industry is definitely exciting! To me, it has the power to bring answers and opportunities to major challenges in the insurance industry.
First, the insurance sector is lagging behind in terms of digital transformation as illustrated by the adoption rate of AI across sectors. Only 6% of insurers have been able to deploy AI at scale, versus life science at 27%, retailers at 21%, or even government at 9%, according to a CapGemini Research Institute report.
Second, the challenge of ethical technology, and especially ethical AI, is becoming a profound trend. As a matter of fact, tech giants have taken strong positions toward responsible technology and data transparency. AI has particularly come under the spotlight, notably due to the bias its use can entail if you are using a generic black-box AI. At Akur8, we managed to develop unique proprietary Transparent AI to allow insurers to leverage it in a safe and fully controlled way. When we are speaking about a process as core as insurance pricing, regulatory constraints call for nothing but utmost transparency and ethics in the use of AI.
And lastly, the value that can be unlocked by AI is tremendous. McKinsey showed that applying AI-based solutions to insurance pricing can generate a whole 3 to 6pp in loss ratio improvement, coming along with 3-4% additional GWP growth through better acquisition and retention performance. This represents tremendous value for insurers, that can be shared and distributed with policy holders.
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