00:38:13 · Amrit Santhirasenan
[00:38:13] S2: Yes. Yeah. So I was a reinsurance pricing actuary for the first three years of my life. So this time of year is very familiar to me. I was embracing myself for very long days, long nights, weekends, evenings of underwriting and pricing work. So it brings back some nostalgia to think about that. So I'll say a couple of things here. I think, you know, what Hx doesn't do is pretend that it's like pulled the future out the universe. So I think we're at the very beginning of using AI for some of this portfolio optimization and insight generation. What I will say really clearly is it's no longer the case. When you started a renewal season in the past, you scrabbled around for absolutely ages trying to get all the risks from the last year, understand what your playbooks would be going into them. So I remember one of the renewal seasons I did myself, had 41 risks priced in like three weeks. It was excruciating. Was like, physics spending stuff, right? And I remember the time running up to pricing those, was like, I got 41 renewals. I need to go and get all the information from last year. And I need to at least have a set of opinions about which risks are going take my time, which risks I'm going to really want to be ready to fight for, which ones I'm not. Now, if you use a system like Renew, that's a database download. It's not running around copy off, copy off file, do not use, which folder is it, going to IT if there's an IT migration saying, sorry, can you give me access to the hard drive again? So I would say we are substantially better prepared in the era that we are right now than we've ever been. As for AI, well, what rich fodder that data is to ask an AI. So, again, thinking about our agents, thinking about our portfolio optimization systems, going forward, probably by the end of this year, you'll be able to ask an underwriting agent or certainly early into next year, you'll be able to ask the renewal, the Hx underwriting agent, which risks and things that you need to spend some time on, which rinky dinks or edge cases, as you said before, or strange things that we do last year during those renewals that we definitely don't want to get caught racing to the finish line at three in the morning again during this year.
00:40:27 · Amrit Santhirasenan, Sabine VanderLinden
And so, you know, I think we're going to be very, very clearly equipped substantially more capably this, you know, in the future to deal with these circumstances. [00:40:37] S1: I wonder how far transparency can go. As you are mentioning, the Hx agents enabling the underwriter to be more effective, but also probably more transparent with one customer. Me as a customer, would I be able to really understand my underwriting risk and actually like I would do with my health, know what are the things I need to do to improve my business so that I get better rate. So make it a little bit more external to the customer. I wonder whether that will be possible someday.
00:41:11 · Amrit Santhirasenan
[00:41:11] S2: I hope so. You know, our, you know, our long term mission at Hx is that if we can increase the productivity, collaboration, and sophistication of the way risk is priced and underwritten, well, then the world can take more risk. Right? Like, so our big mission is like, we will be very proud one day when the world takes a little bit more risk because of one little or a new model somewhere, Hx model, helping an insurance company underwrite that risk. So, you know, as part of that evolution over time, I do believe feedback loops are a key thing. Right? In the same way that there's insurers in The UK, Vitality is a famous example, right, that tries to engender positive, productive feedback loops between the underwriting and the customer behavior. Why shouldn't it be the case that you can say, by the way, you know, these 15 temperature sensors that we had in your energy, in oil rig, you had five near misses next year. Right? You need to change that. And obviously, there's companies like FM that have been doing this for years, right? Where risk engineering forms part of the feedback loop. But you would hope that we'd be able to share some of the insights from the pricing back. I would say the big block to this in my mind is not going to be the technology. It's going to be the competitive dynamic between insurers, the desire brokers, the intermediaries inside our very complex, very long value chain market, appetite and desire for them to socialize that information. And actually, quite frankly, health information can work because, you know, the big... Again, thinking about systems, one of the big things I like to reflect on is, is that system symmetric? Right? So are you going to get to a situation where you can share good news only or you can share bad news only, right? Like, the insurers going to go, by the way, if you keep doing this, we're going to make your prices go down. Who knows? Who knows about that? Those are very challenging questions to answer. But I don't think technology will be a blocker. I think we'll get more and more transparent ability for transparency.
00:43:03 · Sabine VanderLinden
[00:43:03] S1: Yeah, no, absolutely. I don't think that the technology will be the blocker. It's more, I would say, the friction which exists in the market and, you know, what is good business, which is going to be the things we need to think about, which takes me to the broker, right? I mean, when you think about great underwriters who are there, how has their relationship with the brokers improved? I mean, do you have any feedback from the brokers who are actually working with insurers who are working with you?
00:43:35 · Amrit Santhirasenan
[00:43:35] S2: Yeah, it's a good question. You know, the broker relationship is so important and fundamental market. And I think, you know, if you come from outside the market, world is littered with casualties of people who just disrespected the role of the broker. We've said we would never do that. Right? We have active pilots with brokers today. I went to see one of them yesterday. I'm in New York today. Right? But right now... So I'll say this. Right? I think the brokers probably in the same way that the energy companies are the most motivated to understand renewable energy. Brokers are going to be one of the most invested groups of parties to understand algorithmic agentic underwriting technologies. And we talk to brokers who are super interested in the things we're doing there because they want to be just on the frontier, right? They don't want to just be a team who just shared the information with the underwriters to do this. So, you know, I think we're going to see breakthroughs in machine underwriting in the same way that we're seeing the brokers leading the smart follow, pushing the smart follow and algorithmic syndicates algorithmic underwriting capabilities forward. I think it'd be very surprising to me if we didn't see brokers at least pushing the frontier or leading parts of the machine underwriting, AI underwriting missions in our market as much as the carriers. To answer your question about, you know, how have we seen broker relationships with people who use our systems? You know, when I talk to them, they've often come to me because they hear, oh, we've heard about this Hx thing, right? And it makes it much easier for us to get the data out and to share the information. And it turns out you guys can do doc gen, you can do all sorts of other things. How does this work for us? So I think, you know, for the most part, and, you know, maybe I'm a bit biased here, you know, the brokers are interested because they're hearing a little bit about this naughty thing that's making the carriers more responsive and more capable. And I think, you know, that's a good thing, right? In many ways, it just feeds up the value chain to motivate the brokers to be able to do the same thing.
00:45:30 · Amrit Santhirasenan, Sabine VanderLinden
And I think that's been the core of the conversations we've had with the brokers is that, you know, they want to be able to in the same way that carriers want to respond quickly, brokers want to respond to RFPs very quickly, they want to be better at handling renewals. Brokers are a service industry. They want to service insights service insights to their to their clients. Right? And ultimately, they want to win more business. Right? They want to be there much more quickly. So, you know, it's not actually that it's not actually that different. [00:45:59] S1: No, it should not be that different. Actually, one thing which also come to mind is the challenges affecting us with regards to governance and regulation and explainability, right? When we think about those models, they need to be transparent as we just talked about, but also they need to be explainable, right? Fewer and fewer insurers will accept to work with companies which have what we call black box model, right? It has to be white box modeling. And so how do you ensure that you build trust with your clients and the regulators? Do you interact with the regulator in some ways, Amrit, to actually explain how your AI models are being built and to ensure that pricing and risk decisions are done in the right way?