Insurtech Adiona headed up by Paul Harvey was launched yesterday (9 September 2021), aiming to bring data-driven and “technology enabled underwriting” to the UK motor market, underpinned by “north star” core values of fairness and transparency.
The new Gibraltar-headquartered business, which will be led by founder and chief executive Paul Harvey, has created its own device agnostic usage-based insurance model that collects driving data from policyholders via a smartphone app.
Now Adiona is neither the first nor the last to be data driven leveraging AI and world-class technology nor the only one promising to apply fair value pricing. It is significant that it plans selling policies from February 2022 tye month after the FCA's final deadline for its fair value pricing reform has come into effect.
Those motor insurers only currently making money out of selling claims, premium financing and other add-ons will be at risk from this new competitor. Specially as Adiona's business model will leverage Duck Creek's SaaS platform and data science business World Programming, which Harvey described as having a “unique, highly scalable AI team”.
"We should be the most competitive motor insurer in the marketplace,” he added. In part, he believes this is because of the company’s ability to manage its tail risk within its prospective pool of insureds, provide rapid claims resolution and manage both commercial and opportunistic fraud.
He continued: “We should be dramatically cheaper. If we add all that up, that’s 25 percentage points of underwriting loss ratio that we should be better than the market.”
Katie Scott in The Insurance Times 9th Sep 2021
One day, of course, Autonomous Vehicles, Robotaxi Fllets and Auto OEMs will pivot insurance more to product liability rather than insuring drivers. But that still leaves plenty of time for Adiona to make its profits and it is anyway ready to pivot to other lines.
Adiona is just one more signal to incumbent carriers that they must transform business models and technology strategy. BSG- Boston Consulting Group has a term for top performers that combine the best of human and technology capabilities.
BSG, from a study of 2,300 companies, states that Bionic Companies generate about double the earnings and enterprise value of other companies. See the report here bought to my attention by Frederik Bisbjerg who has a fine reputation in transforming insurance companies -
Harvey and Adiona plan to join that group. If you don't want to be left behind I summarise some technology partners that can help you achieve these ambitions.
- Major core platforms Guidewire, Duck Creek, Majesco, ICE, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g. claim management. And traditionally involving Capex and high annual licensing costs though that is changing.
• Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, iptiQ that enable an insurer to allow a customer to interactively manage all their policies from one dashboard
• Digital Claims Platforms Synergy Cloud, RightIndem, Snapsheet, ClaimsGenius, Salesforce Industries, Five Sigma, 360Globalnet, Claims Technology etc
• Ecosystems CoreLogic, Verisk,
• Point Solutions Weathernet, Tractable, Audatex/Solera, Shift, Friss Sprout.ai, Solera and many others
• Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.
• No-Code/Low-Code app building platforms from Unqork, Netcall…
• Embedded insurance Wrisk, Qover, etc
- Major core platforms Guidewire, Duck Creek leveraged by Adiona, Majesco, ICE, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g. claim management. And traditionally involving Capex and high annual licensing costs though that is changing.
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Harvey expects that Adiona, which has built its business on software company Duck Creek’s platform, will start writing policies for UK customers from February 2022. It plans to distribute its products through price comparison websites (PCWs). “The price comparison websites are fantastic, they do a great job, they’re going to make our entry just fantastic,” Harvey continued. Using PCWs, however, emphasises the need for “really strong analytical models” and underwriting to secure pole positions in search results, which Harvey believes Adiona can deliver on.