Digital Insurance Agenda

Lumnion: state of the art AI based pricing platforms for Non-Life Insurance

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Dec 28, 2021

In insurance, the old way of pricing is manually preparing the data – a time consuming activity that can (in some cases) take up to 3 months. Often this is because insurance companies only use GLM for risk modelling and time to market of any price change needs manual intervention and sometimes even requiring hard coded changes in the core systems. On top of that, many companies also lack the data and knowledge to move into behavioural pricing from only risk-based pricing.

With the use of Artificial Intelligence and Machine Learning, Lumnion provides a unique platform where there is no more a need to manually maintain tables of rules at the core IT systems but instead, model risks with the use of all widely available ML Algorithms with the same data set. Changes in pricing and any rule defined gets reflected into street instantly and bring transparency into all ML Algorithms’ results at the same time.

Automating the data preparation process with Lumnion makes it possible to cut down on manual work for actuaries and IT resource in the company so that each can focus on other more important tasks.  Modelling using the same data set with all widely accepted ML Algorithms such as XGBoost, Random Forest and Decision Trees on top of GLM provides more accurate risk measurement and selection.  Lumnion’s platform also allows for real-time price management of the products in an omni-channel way with its embedded rule and pricing engine. The four tools of the Lumnion Platform are already in use by 12 insurance companies in various countries.

Benefits of Lumnion

  • Automates data preparation
  • Uses all widely available ML Algorithms with the same data set
  • Brings transparency into all ML Algorithms’ results
  • Manages street pricing real-time
  • Moves from risk-based pricing to behavioral pricing with the use of external data, where Lumnion provides the non-insurance data to get the 360 view of the customer

How it works
Lumnion has an AI based, Non-Life Pricing Platform that consists of four tools that can also be used separately and independently from each other.

Bee: an Automated Data Preparation and Exposure Calculation Tool.

Cheetah: an AI-Powered Risk Pricing & Actuarial Modelling Tool that can run various ML Algorithms and GLM as well.

Dolphin: an Impact Analysis and Commercial Price Management Tool

Octopus: a Behavioral Price Optimization Tool with the use of External Data (360 view of the customer)

Who is Lumnion?
Lumnion GmbH is a German based company, with offices in Munich, Köln and İstanbul, that develops AI based pricing tools for the insurance industry. They aim to deliver solutions to our clients for fitting their business for the future, redefine what is possible and find the distinctive ways to move ahead of their competitors.

The company was founded in 2017 by Eray Alpan and Aren Haddeler. Cenk Tabakoğlu joined in 2020 as the CEO. Lumnion received its first investment for 550k USD in April 2021.

Lumnion has made it to the top-ten in the InsurTech Hub Munich’s Insurance NXT Program, similarly, selected within the 5 companies among 250 to partner with Ageas Insure Program.

“Lumnion’s mission is to make sure every insurance policy gets the correct pricing in the fastest way possible for its risk.”

Want to know more about Lumnion? Click here to check their website!

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