This interview is part of our new AI in Insurance series, where we interview the world's top thought leaders on the front lines of the intersections between AI and insurance.
In this interview, we speak with Dan Peate, CEO and Founder of Avinew, to understand how his company is using AI to transform insurance, and what the future of the insurance industry holds.
1. What's the story behind Avinew? Why and how did you begin?
DP: I began my career in insurance working for Aon, and previously started another InsurTech company, Hixme. After we brought in a new CEO to run Hixme I started thinking about the insurance world and how, with new technology coming to market, there would be a need for new insurance. Autonomous vehicles were top of mind for me – if a car was going to be driving itself some of the time it means there’s another driver in the equation.
I called my friend and former colleague from 21st Century Insurance Group, Mike Cassenego, to share my idea. Mike agreed that there was a huge opportunity to explore and we started the company together.
Around this time Tesla introduced its Model X. I was interested in getting one
and called my insurance provider about insurance costs – they quoted me $10K a year. I thought it was insanity, but not surprising. When underwriters price a new kind of risk that they aren’t familiar with they typically overprice it.
Insurance prices have become more competitive since, but we don’t think they are where they should be. Avinew firmly believes that when someone drives a safer car, they should be rewarded, not penalized.
2. Please describe your use case and how your company uses artificial intelligence:
DP: This new generation of semi-autonomous and autonomous vehicles are equipped with advanced driver assistance systems (ADAS) and sensors, which will deliver new, real-time driving and usage data. Avinew has found a way to harness this data, apply the latest AI and machine learning techniques, and develop predictive models of accident risk with a higher degree of precision than previously possible, enabling us to offer insurance at a significant discount to those customers that invest in and utilize the latest ADAS and assisted driving features.
By utilizing AI, our insurance program will be able to keep pace as new
driver-assist vehicle technologies deploy into the marketplace and our risk
model will enable autonomous-usage-based discounts.
3. Could you share a specific customer/user that benefits from what you offer? What has Avinew done for them?
DP: While the service is not yet available to consumers, we have been running pilots and the benefits it will bring to consumers are very clear – they include
removing the bias from auto insurance, and providing consumers with safer route options, and cost savings. Drivers will be rewarded based on the semi-autonomous features available in their cars, and how frequently they use them. We anticipate that Avinew’s customers will earn discounts of 10-50 percent.
Here’s why: When new safety features have been added to cars in the past –
airbags, anti-lock brakes, etc. – insurance companies have monitored the impact of these features for up to 10 years before discounts could be realized for consumers.
With this new generation of cars, much of the technology is connected. For
example, Teslas get software updates regularly.. Additionally, we can get large
amounts of data from entire fleets of vehicles and see what’s happening in near real-time. This allows us to underwrite at the speed of tech instead of having to wait for a decade of historical data to populate actuarial tables.