AI header

How technology platform providers can accelerate insurance transformation through AI

By Mathew Donfrancesco / Founding Partner, Nuon AI

This is my second piece in our series all about how Nuon works – this time, specifically looking at the benefits for insurance technology platforms and their insurance customers. 

I love the insurance industry. I’ve worked in this arena for a long time and I’m excited by the possibilities that we’re now starting to see in insurance tech.

But technology has an unnerving track record of appearing to be more or less static, and then suddenly moving with ferocious force. 

It’s like a wave that’s towering over you, steadily growing but not seeming to make any progress, before suddenly crashing down on you with unimaginable force.

So it’s important to acknowledge where we’re at as an industry…

Because if we don’t, we risk being caught unaware by a new wave of insurance technology that isn’t coming… it’s already here.

There’s a good example of this in the 2018 movie, The Hummingbird Project. Based on a true story, it’s about a visionary stockbroker, Vincent Zaleski (played by Jesse Eisenberg) who tries to reduce his software’s reaction time from 17 milliseconds to 16 milliseconds by running a really long fibre optic cable from New York to Kansas.

It’s not a great movie, so you won’t mind if I spoil the ending. Before Vincent can finish his project, a competitor gets her microwave towers up and running first, rendering the whole cable project pointless.

This is what I see happening to the insurance industry in the years to come.

Technology will become increasingly important to insurers and eventually we’ll be competing to shave milliseconds off our ability to flex to market conditions.

Independent Software Vendors (ISVs) have a decision to make…

You’re a forward-thinker (or you wouldn’t be reading this) so we both know that it’s important to act sooner rather than later. You’ll likely have heard phrases like “first movers’ advantage” or “unfair advantage” thrown about. 

But while those terms have some relevance, it’s also important not to rush into a decision over technology simply for the sake of it.

It’s good that you’re willing to embrace new technology and be bold in your choices, but you also need to be judicious in your decisions.

As the earlier movie example suggests, it’s important to choose the right technology. No ISV wants to be known as the Betamax of the insurance industry.

So, if you’re up for the challenge, and you’re committed to staying at the forefront of this evolving industry, what you’re about to read is going to make your day.

Introducing Nuon Adjust…

Nuon AI Live Price Adjust is a software application that helps an underwriter massively speed up their ability to keep insurance pricing competitive and profitable.

Notice that I said “helps” an underwriter, rather than “replaces” an underwriter? More on that in a moment.

What does Nuon Adjust do?

Nuon Adjust makes small pricing adjustments in real-time that counters even small changes in market conditions.

For example, if a competitor lowers their price and the insurer’s take up rate drops, Nuon Adjust will run experiments that seek to match or better the competitor’s move without impacting profitability. Once the experiments reveal a sweet spot, the new pricing will roll out across the segment to reclaim the target conversion rate.

And on the other side of the equation, if the product is converting above expectations, Nuon Adjust will test higher prices to see if more profit can be gained without hurting conversions.

How Does Nuon Adjust Work?

Nuon Adjust runs a series of experiments on a small subset of an insurance product’s quotes. It then takes what it learns from the results and applies it across the whole book.

It then repeats this process again, and again, and again. Each time, the software takes what it’s learning and attempts to further optimise the outcome.

Not only is this process faster than that which can be achieved by human calculations (we’ve performance tested up to 1,000,000 quotes per week, which could mean over 1,000 quotes per second), because it’s building knowledge based on LIVE customer interactions, it’s infinitely more accurate than a purely predictive algorithm.

With just two API calls, Nuon can integrate with any existing IT infrastructure.

Is Nuon Adjust safe?

You are in control! The underwriter sets boundaries for Nuon Adjust so the experiments don’t go above or below the insurer’s risk appetite. 

The Management Information (MI) dashboard lets the underwriter track the performance of the software in minute detail.

Does Nuon Adjust work with ISV platforms?

Yes.

By adding Nuon Adjust to your platform, this service can be made accessible to all of the insurance firms you are partnered with.

There’s a clear interest among insurance companies to use new tech, including AI, to positively impact each stage of the insurance lifecycle. By making Nuon Adjust your connected partner you can attract these insurance companies to your platform, while also giving your existing clients a powerful reason to stick with you.

We recently partnered with Ignite Systems, a cloud-based policy admin platform for brokers, to launch the UK’s first embedded AI pricing service for ISVs. So don’t just take our word for it.

Case Study: Getting started with Nuon is quick and simple for ISVs

In November 2021, we announced our partnership with leading broker policy administration software provider Ignite Systems. Here’s an update from Toby MacLachlan, Managing Director of Ignite on how things have gone since then…

“The technical integration with Nuon was simple – just two API calls and no replacing of our existing infrastructure. We’ve built a strong relationship with the Nuon team and they were really responsive to our questions throughout the process.

“That smooth integration means we have been able to focus our attention on what really matters – working with the insurers on our platform so they can reap the benefits of the AI.

“Helping insurers deliver the best insurance products and services to the market fast is our top priority and Nuon has been a perfect fit for this.”

Ignite logo

Toby MacLachlan

Managing Director, Ignite Systems

Here’s an illustration of how Nuon Adjust works in practice:

An underwriter configures the Live Price Adjust service to allow a +/- 5% adjustment to pricing for an insurance product. After running for a few days,  within the 5% adjustment allowance, Nuon has found some rating profiles that require lowering to increase take-up and also profiles that can afford to move up without a loss in sales.

In making the live real-time changes, Nuon increases overall take-up by 15% without lowering the average premiums.

What’s Next for Insurance Software Vendors?

The fun part is imagining going to your clients and partners and announcing that you’ve added an AI component to your software that will give them an unbelievable competitive advantage.

And it’ll be available to them without requiring a software overhaul, or a massive update.

That’s the short-term view.

The long-term view can also be fun but is wholly dependent on how soon you run Nuon Adjust alongside your traditional underwriting process.

Act now, and you have a huge advantage, leaving the competition scrambling to catch up.

Delay, and you could be the one playing catch-up. Without technology like Nuon Adjust in your corner, competing in an insurance industry that is gaining sophistication is going to be a struggle.

Delay further and you’re chasing the pack. Even adding technology at this point becomes challenging because, by the time you’ve caught up, everyone else has moved on again.

Delay beyond that…well, I think you get the point.

This may sound like an exaggeration but we’ve already seen this play out in the banking and financial trading industry. Once AI technology becomes available to an industry, the game changes.

And here’s the thing that can’t be denied…

The AI technology IS already available: It’s called Nuon. 

And insurance companies and ISVs around the world have already started the process of implementing Nuon Adjust into their workflow.

Remember, the beauty of Nuon is that you can get your feet wet without having to rebuild your software or even engineer an update. Nuon is connected via an API that can be set up in as little as three weeks.

Ready for your first step…?

It’s a small one, but it’s significant.

Simply click to book a free Discovery Call with our partners, who can answer all your burning questions about how our AI can supercharge your platform.

It’s free, there’s no obligation, and we’ll help you figure out if Nuon is the right solution for your software and your insurance clients.

Is Nuon right for you? Let’s talk! Get in touch now to find out more about how our AI insurance products can benefit your business.

Like this article?

More to explore

Socotra + Nuon logos
News + culture

Nuon joins Socotra App MarketPlace

We’re very pleased to announce that Nuon AI is now available on the Socotra App MarketPlace. Nuon AI joins an ecosystem of technology leaders, bringing speed-to-market and agility to the insurance industry.

How AI is transforming insurance
AI + insurance

How AI is transforming insurance

The insurance industry has a reputation for being a late adopter of new technology. However, that is starting to change, thanks in part to the advent of artificial intelligence (AI).