Introducing ISF: Insurability Sufficiency Framework for Autonomous Vehicles — Part 1

Source: Koop Technologies

In March, we announced the release of the Singularity Platform, an insurance platform designed for autonomous vehicles, robotics, and other automation risks. The platform allows AV developers to securely share data to quantify autonomy risk for insurance applications. Insurance companies looking for an edge in underwriting autonomy now have a commercially available tool for that.

Today, we would like to shed some light on the methodology behind the platform, which we call the Insurability Sufficiency Framework™ (ISF). ISF is built on the first principles of insurance, data science, and systems engineering. It encompasses autonomous vehicle data sharing and risk scoring while accounting for the complexity of AV development and its operating environment. ISF contains many features to bolster underwriting more effectively and efficiently and in particular, serves two important goals:

In this series, we are looking to provide a high-level “what, why, and how” of ISF, which we hope will inspire insurance professionals to engage on this topic and explore what we do at Koop Technologies.

Source: Koop Technologies

To begin with, we are an insurance technology company established to tackle the challenge of insuring autonomous vehicle fleets. Currently, there is no underwriting model capable of producing meaningful, reliable, and repeatable results to rate AV exposure (e.g. whether underwriting for primary Commercial Auto or excess General Liability/Products). Insurance companies have to rely on client anecdotes, public documents, and subjective judgment to rate tens of millions of dollars worth of coverage. We believe this is not enough to service an emerging industry estimated to generate trillions of dollars of value in the coming decades. Already today, there are AV developers running fully autonomous operations in multiple operating domains and responsibly pushing for the commercialization of AV taxi, freight, and delivery services. In the next few years, this is only going to accelerate. Nobody wants to have insurance become a hurdle for AV adoption with patchwork underwriting and a lack of fit-for-purpose coverages. This is why we created ISF.

Our thesis is that autonomy requires a practical methodology to estimate risk in order to underwrite it. A capable commercial insurance product should embody such a methodology that will let AV developer-operators continue to grow by making insurance available to them with as little disruption and as cost-effective as possible.

Source: Koop Technologies

So what exactly is ISF? ISF is a risk assessment and insurance rating methodology for autonomous vehicles. On one end, our platform collects autonomous vehicle data through Koop API as well as other means. On the other end, we have a set of ISF Scores that explains the insurability of AVs. Eventually, a given ISF Score will incorporate a rating basis for insurance coverage. The scoring is standardized across certain factors so that insurance carriers can reliably use it from one insured to another. Meanwhile, AV developers and fleets can be assured of the security of the data sharing process and end-use of the selected data fields. ISF also solves the chicken-and-egg problem that has been around for a while in the industry: AV companies don’t want to share data unless there’s a practical use for it, and insurers are uncertain about what to ask for because of their unfamiliarity with this new technology.

How do we know that ISF is technically relevant and capable of providing high-quality results that could be used in an insurance transaction? When building out the parameters for ISF, we deliberately took an unbiased and safety standard agnostic approach, which resulted in a set of the first insurance and technical principles that laid the foundation for the methodology. Some of these principles are:

We believe there is a strong positive correlation between determining the risk characteristics of a given AV operation and the data and analysis that underwriters can use to understand that operation. This not only gives existing insurers a better ability to underwrite AVs but also provides a foundation for new, dedicated autonomy insurance programs.

Source: Koop Technologies

In summary, ISF is an underwriting tool for autonomous vehicles, built on the first principles, and is available through the Singularity Platform. In the upcoming articles, we will touch upon a few technical topics pertaining to the methodology. If you are an AV developer, risk manager, insurance carrier, or broker looking to learn more about ISF or Koop Technologies, we would love you to reach out to us! Also, please make sure to follow our progress on LinkedIn and subscribe to our product marketing list.

In the news: Koop Technologies Announces Singularity Platform — Insurance Platform for Autonomous Vehicle Data Sharing, Underwriting, and Claims Handling.



Commercial Insurance

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