Direct Line built an insurtech it can tweak a thousand times a day

Insurance company Direct Line Group is using a standalone insurtech business in the public cloud to enable it to continuously test and adapt ways of serving customers.

The new business, known as Darwin, was set up earlier this year to provide a digital platform that could be quickly adapted to changes in demand. The new business sits separately from traditional businesses such as Churchill, Green Flag and Direct Line.

It kicked off earlier this year in the motor insurance sector. Sumit Bahukhandi, director of corporate ventures at Direct Line and founder of Darwin, said the business currently only sells through price comparison website Moneysupermarket, but will expand to other price comparison sites. “We wanted to start small and test our way in.”

He told Computer Weekly that the strategy is to build Darwin as a fully digital business. He said that although insurance can be bought online, any issues later on often requires a phone call. Things like changing address, changing car and adding people to insurance all require contacting the insurer, and often include extra charges. “We want to use technology to let people do that easily and not charge,” said Bahukhandi.

He added that although the new unit could cannibalise some of its core business, the company knew it “had to be brave.”

Darwin is built in the Amazon Web Services cloud and only a handful of people are employed in the unit. Bahukhandi said it uses the Amazon “two pizzas concept”, where if a group cannot be fed by two pizzas there are too many and nothing will get done.

The digital end to end service from Darwin is only an example of what the business can do. Direct Line’s plans for Darwin are not set in stone, but rather its very purpose is to enable Direct Line to react quickly to changes in the market.

Who would have thought a few years ago that you could use a mobile telephony device to add your friend to your car insurance for a day in near real time? This is the kind of services people want today and this is where extra revenues will come from for insurers that are capable of doing it.

Bahukhandi said the business needed something that constantly evolves to meet these new demands. “There is a direction the insurance industry is going. Today price comparison websites are a big thing, but we don’t know what is coming tomorrow,” he said.

“In the past we used to think a lot about what tomorrow might bring and then start building for it. This worked because back then it took a long time to build things. But if I do that now, by the time I build something new, tomorrow will be very different.”

He said companies in insurance today, like in many industries, need to build something that can be changed a thousand times a day without things falling over and disrupting customer services.

And the work goes beyond improving how insurance is delivered. Darwin will be used as a platform that will experiment with ways to better understand customers as individuals rather than just a group of similar people. “Why don’t we use machine learning to understand people better and offer them customised insurance?”

The use of AWS from the word go has made Darwin possible. A large insurance group like Direct Line would struggle to be agile enough using its existing infrastructure.

“We focus on providing insurance and technology is a means to an end. Today we can just consume services that are in the cloud,” said Bahukhandi.