Bitesize InsurTech: Artificial Labs
January 12, 2018 George Hanks
Artificial Labs build front and back-end end systems for insurance companies.
The business started life building data intensive applications that sit on top of legacy systems for brands such as BMW and Betfair when it was founded in 2013. It wasn’t until a project with an insurer that the founders became aware of the opportunity for such applications in insurance. In 2015, the business pivoted to developing insurance-only applications and then onto proprietary core insurance systems.
The business addresses two issues:
- Existing core insurance systems do not allow insurance companies to run data-driven processes and cannot support modern analytical techniques such as machine learning. As such, many insurance processes are analogue and inefficient.
- Customers (and businesses) expect a simple, digital purchasing experience, which is not widely available.
Artificial Labs describe their modular solution as a ‘digital toolkit’. The products comprising the ‘toolkit’ broadly fall into two categories:
- Core insurance systems (e.g. policy management, claims management etc.): newly built, cloud-based, API-driven systems that store data in a format compatible with modern analytical methods and that benefit from modern tech (e.g. their claims management platform uses machine learning to approve simple claims)
- Tools for digital distribution: apps and websites, that can be built on top of existing, legacy platforms, or on Artificial Labs’ core systems
Customers (underwriters, brokers, MGAs and coverholders) can either select one ‘tool’ to solve a specific problem they have, or all ‘tools’ as a complete front and back-end package. Products are charged for on a transactional basis and as a percentage of net written premium.
It has been a successful couple of years for the London-based company, raising a seed round of £1,000,000 and working with clients including Aon and Axis. Future plans include securing Series A funding in Q1 2018 and expanding internationally.
The Oxbow Partners view
The core systems space may not be the hyped end of InsurTech but it’s where we’re seeing a lot of activity at the moment. Many are surprised when we say that we have a database of 200 core insurance systems: most have heard only of Guidewire, Duck Creek and the other giants. Other choices are available.
Many of these smaller systems are credible partners even for large companies. Instanda is working with UK insurer LV and others, and Danish company IBA is working with Munich Re.
When it comes to core systems, it’s worth looking beyond the obvious options.