Spy-grade AI designed for Pentagon to transform Asia's insurance market

The American tech startup firm Lazarus AI, once tasked by the US Pentagon with cracking extremist codes, is now looking to apply artificial intelligence to streamline Asia’s life insurance industry.

Founded in 2017 and headquartered in Boston, Lazarus AI has recently made a quiet entry into Japan’s life insurance market. Consisting of only 90 employees working for less than 10 clients, an article published by Nikkei Asia argues it has been gaining traction. It has also received funding from AllegisNL Capital, a venture capital firm backed by Nippon Life Insurance, one of Japan’s largest insurers.

"The market size of Asia-Pacific is very promising, and we are especially focused on Japan, as the country has strong AI adoption demand from companies," said Takao Justin Yamamoto, Lazarus AI’s director of customer success, in an interview with the publication.

The startup develops its own large language models, the technology that underpins generative AI platforms such as ChatGPT. Its multimodal AI tools can analyze document images and graphs, interpret their meanings and interrelationships, and generate reports to support business decisions.

In practice, these tools have allowed insurers to slash claims processing times from 30 days to just 30 minutes. By analyzing difficult-to-read handwritten notes from doctors, digital medical records, company policies, and regulatory filings, the AI can handle the vast volume of paperwork that burdens the sector. 

"The number of documents that the insurance industry needs to review for its business 'stands out' from other sectors," Yamamoto noted, calling insurance particularly suited for AI adoption.

From national security to life insurance

Lazarus AI’s technology was originally developed as spy-grade software to help US intelligence agencies decrypt extremist communications and map connections across massive intelligence datasets. While Yamamoto declined to provide details for security reasons, he explained that extremist codes are often encrypted and deliberately "sabotaged" to make them harder to interpret.

The company has long been a defence contractor in the US, with Pentagon and other US government contracts still accounting for more than half of its revenue. But it is now expanding its customer base into the insurance sector. Yamamoto emphasized that Lazarus AI’s defence experience means its services can easily meet corporate risk prevention standards.

The regulatory environment could also shape its growth. In 2024, the European Union passed the EU AI Act, which categorizes AI used for insurance risk assessment and pricing as "high-risk" and subjects it to strict oversight. Japan, meanwhile, has taken a lighter regulatory approach, applying existing industry-specific rules rather than creating a broad new framework for AI.

By Nazrin Sadigova