Anthony Habayeb founded Boston-based artificial intelligence software company Monitaur four years ago in 2019. A year later, the COVID-19 pandemic hit. But Habayeb said he’s no stranger to solving hard problems, and in fact, that’s what drove him to launch a startup in the first place.

“What a whirlwind time to launch a company. Just a couple of market conditions and crazy things have happened since we started the company,” he said, adding, “I really like solving new hard problems, putting really good teams around [them], and trying to bring stuff to market. I’ve always loved that.”

Habayeb’s career includes time as a strategic consultant for Accenture and executive roles at Gannett, Monster and Yahoo. Prior to founding Monitaur, he served as an advisor to AI companies including Authess, Talla, and Frase. He said around 2016, he “became pretty obsessed with the potential for AI to fundamentally change how so much happens and to make our lives better.”

So, he began preparing a team to strike out on his own.

“[That] has sort of been my career cheat sheet: hire people smarter than me and get out of their way,” he said.

His approach to assembling a team turned out to be a valuable decision, as it placed him ahead of the tech-focused, remote work environment that would permeate many industries during the global pandemic.

“When I started Monitaur, COVID hadn’t happened and the idea of a remote-first company or fully distributed team was super atypical,” he said. “I mean, of course there were some companies doing it, but for the most part, that wasn’t anywhere near the norm.”

Habayeb serves as Monitaur’s CEO alongside co-founders Andrew Clark, chief technology officer, and Michael Herman, lead engineer. With Clark in Richmond, Virginia, and Herman in St. Louis, Missouri, Habayeb – who lives near Boston – said he had no choice but to begin building a team outside of geographic restrictions.

“I was committed to the idea of hiring the best people no matter where they are, because I felt the technology was out there in the market to really enable you to be together even though you’re in different places,” he said.

‘You Cannot Engineer Culture’

This was his first lesson in launching a startup, he said. His concerns about building company culture quickly dissipated as he sought intelligent employees who shared Monitaur’s values.

“My biggest worry about a remote first company, or decentralized business, was how culture could be executed,” he said. “All I can say is you cannot engineer culture as much as you try. I think there’s a lot of conversation around certain things you can do to try to build culture, but really, how you lead, how you hire, the way that you talk about your values, the way that you really espouse those values – those things start to organically manifest culture.”

Not only was this an important lesson in Monitaur’s early days, but it allowed him to put his problem solving abilities to the test.

“You can build an amazing company culture without being in the same place. I didn’t know until I tried, because I’d never been in a remote first environment,” he said. “Not only was I starting a company, but also trying to build this new model. It’s pretty exciting to see how you can distribute companies in today’s world to build the best company with talent, no matter what they look like or where they are. That’s a huge advancement, I think, for how companies are built.”

As he built the team at Monitaur, Habayeb realized that the company’s focus on innovation and problem solving was spreading from the inside out.

“We are always continuing to build new needed solutions for hard problems and demonstrate how we’re being innovative to the market,” he said. “Some of our engineering team is at Monitaur because we are doing hard, novel things, and I think some of the best engineers are looking for places that are solving new unsolved challenges and problems.”

Creating Trust and Visibility with AI

One of those untapped areas in which Habayeb saw potential was the AI environment, which ultimately led him to insurance.

“Everyday, I get more and more excited and passionate about how important insurance is as an industry,” he said. “Nothing runs without insurance. That building that was built doesn’t happen without insurance. From a more emotional perspective, when we get in a car accident, when we lose a loved one, when we get hurt, insurance is the thing that catches us. In our scariest moments, insurance as an industry is there for us.”

A challenge that he believes insurers using AI will have to navigate, however, is regulation.

“The regulatory structure around insurance is decentralized and complex,” he said. “So the opportunity to insert software in between the challenges of technological advancement and regulating and protecting consumers was a perfect place for Monitaur to focus.”

The company places a focus on building software to enable governance of AI technology used in high risk situations, Habayeb said. Its mission is to create more transparency around data systems to allow businesses, consumers, and regulators to work together in deciding where to take insurance next.

In furthering this mission, the company announced today that it has secured $4.6 million in funding. The funding round was led by Cultivation Capital. Rockmont Partners, Presidio Ventures, Plug and Play. Studio VC also participated in the round.

Adding to its regulatory focus, Monitaur also announced that Evan Daniels joined its advisory board. Daniels was most recently director of Arizona’s insurance regulatory agency and co-vice chair of the National Association of Insurance Commissioners “H” committee, which oversees regulator collaboration and policy development across innovation and technology areas including artificial intelligence and big data.

“What’s lacking right now [in insurance] is a lot of visibility and confidence that we know what exactly is happening under the hood, and that’s what Monitaur wants to try to enable,” Habayeb said. “Ultimately, I do think that regulators are going to be asking for a certain level of detail that is new for companies to have to answer, but it will require companies to go back and start documenting some things maybe they didn’t document fully before around their model development journey.”

He said this means insurers will need to be thoughtful about how to take advantage of AI technology’s potential, while at the same time, ensure appropriate discourse about the risks and challenges of using machine learning, AI, and big data in the industry. This starts with understanding the use cases for the technology and maintaining control over the customer experience, he added. He pointed to AI chatbot, ChatGPT, as one recent example.

“If I’m a company considering using a large language model, I want to be crystal clear on what’s my use case? What benefits do I think I can realize?” he said. “I then want to be crystal clear on what data do I have to give to this application to get answers back to derive that value? And how is that information protected or not protected?”

Habayeb sees risks for insurers that don’t understand how to use AI while maintaining a degree of control or visibility over the consumer experience.

“I’m accountable for what this technology does,” he said. “So just like AI governance in general, you need to start the project with [asking], ‘What are my goals and objectives?'”

However, he sees an even bigger risk for insurers that don’t embrace AI technology at all.

“I think one of the concerns that I have as of late is that we’re overly focused at times on the scary parts of AI and forgetting … that AI and machine learning absolutely has the potential to make our lives better within insurance and to create new products and experiences,” he said. “I mean, my mom knows what I do now. ChatGPT has enabled the mom test, which I think is a huge part of a startup: do my parents know what I do?”

Joking aside, he said having visibility among consumers is important. This is because it will allow consumers to not only feel comfortable engaging with new technology, but it will also allow insurers to help those outside of the industry understand how the technology works. This starts, he said, with finding “a happy place where companies are able to meet the expectations of regulators and regulators are not passing on expectations that they can’t administer.”

“This is critical work. Insurance is regulated because the average person doesn’t understand it,” he said. “I know that there are regulations that are in place to protect me, but also, they are in place to try to enable responsible innovation. They are pro-innovation. They aren’t anti-innovation. For Monitaur, I think insurance is this really unique and exciting place where the potential for data and models to improve our lives is as great as anywhere possible.”

With all of this in mind, one side effect he hopes will emerge from Monitaur’s focus on AI governance is that other innovators outside of insurance will be pulled into the industry.

“We want to be an indispensable actor in the ecosystem. Are we going to solve AI governance by ourselves? Absolutely not. But can Monitaur be a connected and meaningful piece of that ecosystem? You bet. So we’re going to keep spending time with regulators. We’re going to keep spending time with our customers, and keep spending time with major platforms,” he said. “I think there’s just such an exciting opportunity over the next couple of decades to positively transform insurance. So not only do I hope we serve the industry, but I hope we also pull more people into the industry, because this is a great sandbox to get to play in.”

Watch the full interview with Habayeb on Insurance Journal TV.