Digital Insurance Agenda

Nuon AI: millions of experiments through real-time AI to maximise pricing performance

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Jun 15, 2022

The personal lines insurance market is saturated with brands competing in the same space, customers looking for the lowest price and new regulations affecting the ability to innovate and compete. Also, legacy systems hold back innovation where needed.

As a result, insurers, brokers, MGA’s and insurance technology platforms are increasingly struggling to keep pricing strategy competitive and profitable. A new market entrant or a competitor’s price change can already have a significant impact on sales before pricing and underwriting teams have had time to respond.

Nuon’s vision is to apply AI across the full Insurance Product Lifecycle, from quote and buy to claims and renewal. With its AI solutions, Nuon adds a ‘digital brain’. Its first product to market, Live Price Adjust AI, is focused on optimising an insurer’s pricing strategy for P&C products by running millions of experiments via an API.

The solution can be used to find optimal price points to maximise policy take-up within the bounds of a defined underwriting appetite. Also, it can be used to find optimal price points that allow for an average overall premium increase without loss of take-up. Ensuring that both sales and underwriting goals are being met, even during unplanned market events.

Nuon’s AI technology enables real-time pricing adjustments and augmenting the traditional ‘risk price’ developed by the insurer. It is a cloud-based, API driven Artificial Intelligence (AI) solution, which does not replace, but complements insurers’ existing systems.

Having launched in 2021, Nuon AI has seen significant early interest from digital insurers, insurance technology platforms and brokers, all creating data simulations, dashboards and pricing recommendations to inform underwriting strategy at pre-live stage. In the UK, Nuon AI has strategically partnered with Ignite Systems – a leading broker policy administration software – providing AI solutions to Ignite’s network of insurers.

How does it work?

With millions of experiments, Nuon AI’s Live Price Adjust solution makes discreet pricing adjustments in real-time to match market conditions. The insurer is in complete control and can choose to either apply price changes in real-time, or review pricing recommendations retrospectively as validation of a pricing strategy.

Experimenting on live data, the solution enables pricing adjustments on a subset of an insurance product’s quotes to gain market insights and apply the learnings either across the whole book or to a defined cohort of customers. Keeping pricing optimal and relevant.

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

With just two API calls, Nuon AI can integrate with any existing IT infrastructure. The product is configurable, allowing an underwriter to set upper and lower bounds for price adjustments and the percentage of the book which can be experimented on. A user-configurable MI dashboard keeps the insurer informed in real-time of the AI performance, tracking items such as take-up rate and premium uplift. A fully auditable data extract can be viewed or downloaded to show what actions, adjustments, experiments and prices changes have been made by the AI for compliance.

Why did we select Nuon AI for DIA Amsterdam 2022?

Innovation through AI represents a significant trend and opportunity for the insurance industry. According to a 2020 report by Accenture, “76% of insurance executives say the stakes for innovation have never been higher. A 2021 report from Deloitte shows that 40% of CIOs are going to increase AI spend. According to McKinsey, AI can drive a staggering $1.1 trillion in potential annual value.

At DIA Amsterdam, Matthew Tomlinson, Founding Partner Nuon AI and Paul Doran, Partner Nuon AI, will share a deep dive into how Nuon’s Live Price Adjust AI is making algorithmic underwriting a reality. They will be available for tailored Discovery Sessions to discuss how Nuon’s AI can solve specific business needs and challenges.

Who is Nuon AI?

Nuon launched in 2021 with a distributed team across two countries (UK & Canada) building its AI solution for the global insurance industry. Its co-founders have worked together for 20 years, across three start-ups and five insurance tech companies. With deep insurance, technology and AI knowledge, the team is uniquely positioned to apply AI to transform insurance and understand the friction that insurers face when integrating software systems.

In March 2022, Nuon announced its oversubscribed $1m pre-seed round had closed and extended the round led by Haatch Ventures to grow the team, following customer traction in the UK and US.  Several high-profile investors and angels supported the round. Nuon AI’s customers are at various stages of development and range from technology platform players (ISV/SI), to tier 1 carriers and new digital MGA insurtechs.

“Nuon’s vision is to bring genuine AI innovation to the full insurance lifecycle, from quote and purchase, to claims and renewals. We are combining our shared expertise in AI, insurance software and technology to help move the industry forward.”

Matthew Tomlinson, Founding Partner

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