How To Gain Competitive Edge with AI-Based Risk Scoring
A few weeks ago, DIA interviewed Veysel Sinan Geylani, founder of Virtual i Technologies. We spoke about his vision for the future, where insurers will become even more aware of risk calculation than they are today. Globally no more than about 5% of the risks are assessed, whereas the rest are simply priced based on good faith. Virtual i Technologies believe that each and every risk should be seen and assessed, either by computer eye or by human eye – or both.
What is [VRS] Virtual Risk Space about?
Veysel Sinan Geylani: “Virtual i Technologies provides a technology that enables remote inspections and data-driven (AI) risk assessment for property insurers. It allows underwriters to assess risks before insuring them. Whereas now, 95% of the commercial risks in the insurance industry are being insured without being seen or assessed. The Swiss based company was founded in March 2018 and enables the insurance industry to shift from ‘goodwill’-based to dynamic and data-based decision making (see image below). Created by Virtual i Technologies, [VRS] Virtual Risk Space is a platform to assess risks of different sizes, from micro to large, before they happen. [VRS] enables clients to highlight up to 100% risks during the underwriting process and thus the probability of picking up bad risks are reduced. The solution is a SaaS, which provides AI-backed risk scoring, improving the algorithm using advanced data analytics and machine learning. To use VRS, no change management is needed within the company, just a click on a link. That’s it. We serve clients in Europe, North America, Canada, Asia Pacific, Middle East and Africa, basically all around the globe.”
What makes [VRS] unique?
Veysel Sinan Geylani: “VRS is unique because it offers solutions to existing problems that come with risk calculation (see image down below). We work closely with the Data Analytics Division of Houston University and provide a machine-learning risk scoring system. Because of this collaboration, [VRS] provides objective, scientific risk assessment that allows accurate report generation in real-time. Also, tailor-made forms can be assigned either to adjusters or to customers for real-time data gathering. Both remote and on-site inspection is supported, the latter via a world-wide network of partner risk engineers. Also, you can see and assist a client using live video solutions. Wherever in the world a client wants to extend their business or inspect a risk, and a risk engineer is required, [VRS] can provide that service.”
“This hybrid business model serves most insurance business lines and consequently targets a significant number of players in the insurance industry such as insurers, reinsurers, brokers & agents, risk management consultants and risk engineers. It also serves on most value chains: from distribution, underwriting and claims to service, marketing and sales. Virtual i Technologies helps their customers increase their sales. For example, their remote inspection technology increases distribution power of the customers in terms of reaching out to risky markets and regions. In immensely competitive environments, flexibility and costs are key. As such, Virtual i Technologies created a business model that can be efficient, cost-wise, both in developed and in emerging markets.”
So, what are the concrete benefits of Virtual Risk Space? Can you give some concrete figures?
Veysel Sinan Geylani: “Sure! Using [VRS] offers a range of benefits. Although, this is based on the experience with many customers, it gives you a general idea of the outcomes when using VRS.
- Decrease loss ratio by up to 12%
- 100% real-time risk data
- Improve workload efficiency by 40%
- Reduce risk engineering headcount in their clients’ book to zero.
- Digitalize their clients’ product portfolio by 100%.”
A significant impact on the bottom line! So. How would this work in practice? Can you describe a recent use case, to get a better feel of the details?
Veysel Sinan Geylani: “Delighted to do that! Let me highlight the use case of one of our clients, a top 3 global broker. One of the long-standing clients of this broker is a multi-site textile manufacturer. They were considering working with a different broker, because of ‘our’ global broker’s inability to conduct risk engineering surveys of their factories to international reinsurance standards.
It became apparent that the global broker was only surveying one of the 13 factories every year, despite their claims of world-class proficiency and capability. This meant that out-of-date information was being provided to insurers for most of the insured locations. Virtual i Technologies enabled the broker to prepare a proposal that would see all 13 factories surveyed to international reinsurance standards within 3 months of a successful appointment. The broker won the contract and Virtual i Technologies used [VRS[ to conduct all 13 surveys remotely.
All stakeholders – the insured, the insurers and the broker – saw value in [VRS]. On the same day the surveys were conducted, the risk scoring output could already be shared with the broker’s Global Head of Risk Engineering. On top of that, the cost for surveying all 13 locations was equivalent to what the previous broker was charging to insurers for only one survey. The manufacturer did not see these surveys ‘as an audit’ anymore, but rather as a risk management and business continuity tool. The structured risk data provided, the accuracy of the results, and the user experience that [VRS] delivered, demonstrated to the broker that Virtual i Technologies can deliver the required quality in a fraction of the normal time.”
Congratulations! These are significant results for the client and the broker. We can imagine that your solution strikes the right chord in the insurance community …
Veysel Sinan Geylani: “Definitely. Virtual i Technologies was actually founded quite recently, in March 2018. We’re based in Zurich, Switzerland, but we operate globally. In that short period we have acquired one of the top global reinsurers and 4 out of 5 top global brokers. We also have reputable insurers, risk engineers and lost adjusters in our client base. We certainly get the recognition. In September 2020, we won the London ACORD Insurtech Innovation Challenge. And we are also proud and humble that in winter 2021, Virtual i Technologies won the Morgan Stanley Multicultural Innovation lab (MSMIL) in New York. Morgan Stanley promotes financial inclusion and provides access to capital for technology-enabled companies led by women and multicultural entrepreneurs – and is also an investor in Virtual i Technologies.
Earlier this year, we won the DXC invitational Insurtech Europe 2021. With this award the company was recognized as ‘the real value-added innovation product at the right time’, according to the DXC jury. Actually, DXC Technology is now in a POC with Virtual i Technologies.”
We recently learned about your support for ‘Eyes for Africa’ …
Veysel Sinan Geylani: “Yes! We’re honored that we can support. Every inspection made with Virtual Risk Space will be directly contributing towards somebody’s ability to literally see again. Eyes for Africa (EFA) is a not-for-profit, non-government, non-denominational, sight-restoring charitable foundation operating in Africa. The organization is run entirely by volunteers and is dedicated to free sight-restoring cataract removal & other eye care in poor communities in remote, rural Ethiopia. The same way [VRS] lets players in the insurance industry see the risks before insuring them, Virtual i Technologies challenge themselves and their partners to perform remote inspections for the greater good. For both in insurance and life, seeing should not be a luxury, but a necessity.”
Find out more? Join a Webinar or Virtual Round Table this Fall
You can read a previous interview with Veysel Sinan Geylain about his vision for the future of insurance here. Please feel free to contact Virtual i Technologies directly at: [email protected] or check out https://virtualitechnologies.com/ This fall, DIA will organize a Webinar and a Virtual Round Table in collaboration with Virtual i Technologies. If you’re interested, send an email to Dominique to secure your seat.
Veysel Sinan Geylani, Founder of Virtual i Technologies