Insurance Times gets the exclusive first interview with Adiona founder Paul Harvey, who aims ‘to create a consumer brand in insurance that people love’
EXCLUSIVE: Insurtech Adiona has launched today (9 September 2021), aiming to bring data-driven and “technology enabled underwriting” to the UK motor market, underpinned by “north star” core values of fairness and transparency.
The new Gibraltar-headquartered business, which will be led by founder and chief executive Paul Harvey, has created its own device agnostic usage-based insurance model that collects driving data from policyholders via a smartphone app.
Following customers undertaking a test drive, Adiona uses the data gathered alongside artificial intelligence (AI) and machine learning to quote insurance policies based on how customers drive – factoring in metrics such as acceleration, braking, cornering techniques and speeding. Quotes and policies also take into account the conditions customers drive in and the vehicle they drive.
For Harvey, the lifeblood of this approach is “to protect the consumer and make sure we get the consumer a good deal” - this is especially pertinent considering the FCA’s current work around general insurance pricing, which centres around providing fair value.
Harvey explained: “When we reflect on how we priced insurance in the 20th century, by using factors such as wealth, occupation, credit scores, gender or age or even some more nefarious things like if you don’t have a British or UK drivers license, or if you’re an immigrant to the country - that has nothing to do with how you drive, what you’re driving and your driving conditions. Nothing.
“We’re fundamentally going back to the roots of insurance in a very fair and transparent way.
“What we’re trying to do is give the consumer a better deal. And the way we execute on that is through technology enabled underwriting.”
Becoming a go-to consumer brand
Harvey expects that Adiona, which has built its business on software company Duck Creek’s platform, will start writing policies for UK customers from February 2022. It plans to distribute its products through price comparison websites (PCWs).
“The price comparison websites are fantastic, they do a great job, they’re going to make our entry just fantastic,” Harvey continued.
Using PCWs, however, emphasises the need for “really strong analytical models” and underwriting to secure pole positions in search results, which Harvey believes Adiona can deliver on.
“We should be the most competitive motor insurer in the marketplace,” he added. In part, he believes this is because of the company’s ability to manage its tail risk within its prospective pool of insureds, provide rapid claims resolution and manage both commercial and opportunistic fraud.
He continued: “We should be dramatically cheaper. If we add all that up, that’s 25 percentage points of underwriting loss ratio that we should be better than the market.”
The lynchpin of what makes Adiona stand out, however, is its focus on fairness and transparency – a topic Harvey is clearly passionate about when speaking exclusively to Insurance Times.
He said: “We think we can just be straight with our customers and offer them a fair deal that really differentiates us.
“Fundamentally, the country just doesn’t trust insurers, which is why they’re going to the PCWs. And that’s where I think data is going to set us free. It really will set us free and allow us to give our customers just a better deal. We’re going to bring this to the 21st century.
“We’re about fairness and transparency. You drive that with a customer-centric view, that’s the soul of the company.
“With having this kind of set up, there’s no reason why we can’t create a brand that people really love. There should be a way to create a consumer brand in insurance that people love, but to do it, you’ve got to be fair and transparent with them.”
Insurance elite advisory board
On setting up Adiona, chief executive and founder Paul Harvey admitted that his stellar cast of advisory board members were actually in place before the business hired any employees.
This includes US telematics expert Richard Hutchinson - who mentors Harvey every Saturday - as well as the “most successful insurance entrepreneur” in the UK Penny Searles (pictured).
Harvey also has Michael Halbherr, a board member at Zurich and global expert on original equipment manufacturer (OEM) data for cars, participating on Adiona’s advisory board, alongside global claims expert Brian Passell.
Harvey described the panel as a “really exceptional group”, designed “to make sure we keep this going in the right [direction]”.
Another huge influence on Harvey’s work is his uncle Henri Joli-Coeur, who passed away four years ago from cancer. Joli-Coeur co-founded a reinsurance business in Canada and had many early conversations with Harvey about the benefits of using data within insurance.
Levelling up
Despite the insurtech only coming out of “stealth” mode this week, Harvey already has his eye on how Adiona can grow – looking at how the business can scale is vital to him, especially in terms of potential partnerships.
“Everything about us is scalable. There’s some really great insurtech startups, they come more from the app world, they’ve got great apps, but fundamentally this is about insurance. And that’s what our DNA is,” he said.
“Other aspects of our business - the core systems, the billing systems, the underlying infrastructure - we just take best in breed partners [that] are hyper scalable, so not just for 10,000, 20,000 policies – they can do a million policies.
“That’s where working with Duck Creek gives us enormous flexibility. We’re focused on motor, but [we could] move into another line, we could move into other geographies.
“We are in the starting blocks of this data-driven insurance. We are all in the starting blocks. No-one’s ahead of us. This is a race.”
Harvey acknowledged that although Adiona won’t start scaling up “until we’re ready”, the business can “turn these engines on very quickly” and “pivot in any direction at scale”, whether this means collaborating with brokers or delivering commercial or life insurance products. He attributes this freedom to the versatility of Duck Creek’s technology.
In terms of other key partnerships, Adiona is also working with data science business World Programming, which Harvey described as having a “unique, highly scalable AI team”.
In the future, Harvey predicts the need to develop further industry partnerships as vehicles themselves become devices that connect to the internet, replacing apps and telematics black boxes.
Emphasising that Adiona will ”work with anybody”, Harvey explained: ”We will be device agnostic and ultimately we’ll be connected to the best telematics device in the world, which is going to be the vehicle itself.
”The journey there and all the models that we have to build, our analytics to support that – there’s a lot of work and we’re going to have to work with lots of partners on that journey to make it work.”
Putting the word out
Following today’s launch – which is culminating with a champagne reception at London’s Royal Automobile Club this evening – Harvey will be preparing to attend the InsureTech Connect event in Las Vegas next month, where he is hoping to perform a joint demonstration with Duck Creek around Adiona’s electronic first notification of loss solution and how it integrates with the software company’s policy administration rules engine.
This work took just six months, Harvey explained.
Upon his return to the UK, Harvey will continue to complete the Gibraltar regulator’s documentation and finalise “long-term deals” before being ready to start writing policies from February 2022 – one month after the FCA’s final deadline for its fair value pricing reform has come into effect.
“Fundamentally, it’s about making sure the customer gets a fair deal here and we’ve got to make sure as underwriters that we’ve got the consumer focus and the passion,” Harvey continued.
“We’re not like the other insurtechs that say it’s all about tech. We say it’s about insurance that’s tech-enabled and that’s our differentiation.”
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