Modelling Reimagined - Amrit Santhirasenan, hyperexponential

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A qualified actuary, Amrit Santhirasenan co-founded hyperexponential, or hx for short, in 2017 after becoming frustrated by the lack of available tools to build and run his models when he was Head of Pricing and Analytics at his previous employer.  

hx went on to become part of Lloyd's Lab Cohort 3 which accelerated the company's success in finding supporters and clients in Lloyd's and beyond.

Data-driven decisions

At root, says Amrit, hx build tools that will help people price from weird and wonderful data sets.

“If you're a specialty insurer and you're trying to price Tesla or the PA cover for a football team, the sorts of data sets you get are going to be a little bit strange. 

“They're interesting and varied, but they are probably going to be small; they're going to be awkward and you're going to have to do quite a lot of work to get the results you need to drive a decision.  So, for us, they're weird and wonderful in a positive and a negative way.”

Collaboration is key to hx’s success, while involvement in the Lloyd’s Lab provided a structured framework to work with both prospective clients and Lloyd's, with the idea that commercial relationships, the work started, continue once outside.

hx set themselves three objectives for the Lloyd’s Lab:

  • Test and demonstrate the speed, power and agility of hx’s platform
  • Work on and to be exposed further to best practice pricing
  • Collaborate with fellow cohort members

Effective pricing at pace

“One of the biggest challenges in my previous life, and I've learned this through the 13 years I was in the market, is that in commercial specialty insurance pricing changes fast,” says Amrit.

The role of hx, says Amrit Santhirasenan, is to get analytical pricing tools into underwriters’ hands at the swift pace the market changes – to build a product designed to match the complexion and nature of the market itself.

Amrit provides a recent example of this in action, which formed part of hx’s Lloyd's Lab work.

“One of our mentors wanted us to try something out for a deadline in Cohort 3 and one of our developers built him a new model in 32 hours. Speed and agility are a key part of what we’re offering.”

Flexible data sources

The hx platform, reNew, works end-to-end for actuaries in clients’ companies to build models, deploy them through to underwriters, and capture all the data the models use and generate. The key, according to Amrit, is in flexibility.

The models can be the clients’ models, either existing models from spreadsheets, alternative platforms, parametrised from loss data, and increasingly from third party sources (a key topic in Cohort 3).

“There's a huge challenge in getting data. If you're waiting to get the data from the broker or the submission, you're already behind the curve. hx uses modern open-source technology to make it easy to get data from a variety of different sources.

“reNew can pull data from all sorts of sources - historical data, API feeds, underwriter judgment - allowing our clients to combine them as they need and get the result out there to use and to test very quickly. It's the full gamut of data sources.”

Working with underwriting workflows

Amrit acknowledges that fitting into underwriting workflows is a challenge. It’s one hx overcomes by spending time at the very beginning engaging with clients and challenging them on whether they understand their own processes.

This was one of the key things Amrit and hx pitched to Lloyd’s Lab – that hx are very much an ecosystem player, and not a monolith trying to eat up the entire value chain.

Approaching legacy

“If I had all the answers to legacy, I'd probably be giving them to you from my yacht,” says Amrit.

But he does see an ecosystem of robotic process automation and other tools emerging to make integration with legacy systems easier.

“Mercifully, this means we don't have to solve that one ourselves. So, can we integrate with legacy systems? Yes. Especially with insurers who have API-centric systems. Is it a high priority to build out of the box integrations for legacy systems without API access? No, but we're working on it.”

Dealing with the cyber challenge

Forty years ago, 80% of risks were tangible physical assets, now 80% are non-tangible. How does a company like hx handle this?

“I ask do you underwrite risks that are coming to market in 2022 like it's 1996?” says Amrit. “It's an area of intense interest to us, we're absolute believers that these classes are going to be an increasingly large part of the future insurance landscape.”

hx know that good quality pricing and analytics have a direct impact on the bottom line, and this is particularly true for cyber and IP intangibles. Amrit sees involvement in this area as a key way hx can keep ahead of the pack.

Speed and agility are hx’s stand out qualities, according to Amrit, particularly where clients need to build quickly.

“We're working with clients who have big challenges to get models up and running and out to market really quickly, and that's where we really can stand head and shoulders above our competitors.

“Designs - on anything from classical liability models, through equine, through energy, through to some of the more esoteric - that typically take tens to hundreds of days to get built, in a system like hx’s we can do it much more quickly.

“What we say to our clients is, let hx pull the technology risk away and let you focus on the insurance risk."

Collaboration and coffee

Over the next year, off the back of the Lloyd’s Lab Cohort 3 collaboration, hx has a number of new frontiers of risks to model.

One thing assisting hx to keep ahead of the curve, says Amrit, is participation in InsTech London events.

“I’ve been coming to InsTech London events for years. I think one thing I've learned having worked in technology for the last couple of years,is that the power of community is tremendously valuable. I'm a huge believer in it.

“We went originally to your events while hx was a twinkle in my eye. Over the last couple of years, it's been more about getting on top of the market, understanding more about what the market is doing. And in the future, I think it's probably even more about engaging.”

One thing he is keen on is having conversations with others in the marketplace, whether that’s on LinkedIn, via hx’s website, or by reaching out to him face-to-face, for example when he’s stopping by the Lloyd’s Lab.

He also likes coffee. “You can find me in a coffee shop in the Square Mile with little difficulty!”
 

You can get more information on hyperexponential from their website. Episode 52 of the Instech London podcast, featuring Amrit's conversation with Matthew Grant is also available in our Podcast section and from iTunes, Spotify and Podbean