AI and insurance: ‘The Hare and the Tortoise’ – Earnix CEO interview

Change can happen suddenly like the cracking of ice, but broader shifts tend to occur more tectonically, with progress grinding its way through into advancement. Which is going to be the case for artificial intelligence (AI) in the insurance sector?

The former could be the advent and rise of AI across the world’s industry, the latter might be applied to the pace set by the insurance industry.

This pain point for technology implementation was raised by Robin Gilthorpe (pictured), CEO of Earnix, at the company’s Excelerate 2024 event in London.

“It’s a paradox, and you really get to see this in London where so much of everything is,” he said. “There’s lot of great ideas and capacity to innovate, but there’s a huge difference between inspiration and innovation.

“The latter isn’t valuable until you get it to market. But insurance is, unsurprisingly, a slow-burn market because insurers spend their whole careers, not just their days, thinking about risk.”

He went on. “That’s in our nature, and it is a good thing to understand risk, but you can let it stop you from doing things. That’s the whole challenge. And one of the problems we have, as humans, is that we under evaluate the risk of doing nothing.”

Gilthorpe is an evangelist for AI, although he noted that it is a mistake to refer to AI as one technology; instead it is a series of them.

He should be an evangelist, too—last year, he observed, some 2.6 billion insurance quotes were run through Earnix’s platform. But tension remains between the ‘move-fast-and-break-things’ nature of AI and the wider insurance industry, which prefers its changes to be gradual and well considered – and ideally backed by decades of historical data.

What the regulators say

 Where, then, is the balance between these two contrasting dichotomies?

“This is a really good question, and one that we were discussing recently with a bunch of CEOs,” Gilthorpe said.

A crucial test could be regulators’ attitudes to how AI is used.

The Financial Conduct Authority (FCA) is the primary regulator and for re/insurance brokers and intermediaries, and the Prudential Regulation Authority (PRA) is the equivalent main watchdog for re/insurance carriers and underwriters.

“One of the questions we had was that one of the CEOs had been talking to the FCA, the PRA, and other bodies,” Gilthorpe said.

“I can’t say what specifically was said, but the upshot is that the regulators don’t want to be in the middle of every decision. However, they do want reassurance that you’ve got the right prudential steps in place so you’re not coming up with outcomes that show bias,” he added.

Gilthorpe said Earnix’s aim is to “organically double its business” within the next three years.

“We are fortunate in that we are profitable if not wildly profitable,” he said. “That’s important because we don’t have to fundraise, which can be distracting. We’re making money so that creates a level of discipline that shows that our investments are in the right place. Just in terms of product investments, we’re doing more than £50m a year and seeing returns from that.”

The technology provider launched its London office in 2023, and now Gilthorpe said it has customers across thirty-five countries. His plan is not to expand (much) beyond these borders, but to instead deepen the customer base within them.

“We use AI, but we see ourselves as complementary to the process and static data-oriented systems already in place. We are a faster-moving complement to all of that. That’s the difference between being in business and being able to win business,” he added.