Armilla AI, a Lloyd's of London Coverholder and pioneering Managing General Agent (MGA) specializing in AI insurance, today announced its successful partnership with MKIII, an AI-powered embedded lending platform serving credit unions and financial institutions. Through this collaboration, Armilla has independently evaluated and insured MKIII's Loan Decision Model (LDM), providing credit unions with contractually guaranteed AI performance backed by A-rated global insurers.
MKIII's challenge extended beyond building an accurate lending model, it required earning institutional trust to help credit unions confidently expand lending while managing capital constraints and regulatory requirements. Credit unions serve over 143 million Americans and manage $2.37 trillion in assets, yet many struggle to assess credit risk due to limited capital and outdated tools. MKIII's AI-powered platform addresses this challenge by evaluating over 4,000 borrower variables and leveraging more than 5 million historical loan records to predict loan defaults with measurable accuracy.
Armilla's comprehensive evaluation of MKIII's Loan Decision Model assessed performance, fairness, and robustness dimensions, quantifying the model's predictive accuracy across diverse borrower profiles. Upon successful validation, Armilla issued a Performance Warranty that insures MKIII's model against measurable underperformance. If model accuracy falls below Armilla-verified thresholds, the warranty triggers financial compensation to cover verified losses, transforming MKIII's technology into a contractually guaranteed, enterprise-ready lending solution.
The insurance-backed solution delivers substantial benefits for credit unions and their members. Financial institutions gain trust and transparency through independently verified and insured model performance, enabling them to approve more borrowers responsibly without increasing risk exposure. The warranty-backed assurance helps reduce perceived risk and capital reserve requirements, improving capital efficiency for credit unions operating under tight regulatory constraints. Additionally, the insurance-backed guarantee accelerates adoption by eliminating the need for lengthy pilot phases and building confidence among risk and compliance teams, while ultimately improving access to credit for borrowers who might otherwise be denied.
"This embedded insurance structure demonstrates how Armilla bridges the gap between AI innovation and accountability," said a company representative. "For AI providers like MKIII, our warranty guarantees the ROI of trustworthy AI by transforming technical performance into financial assurance. For deployers like credit unions, it serves as a vetting mechanism to identify, validate, and confidently adopt high-performing, reliable AI systems."
Armilla AI is a Lloyd's of London Coverholder and the world's only Managing General Agent (MGA) exclusively focused on AI insurance. Armilla combines deep technical expertise in assessing AI risk with innovative insurance solutions, including AI performance warranties and liability insurance for enterprises and AI vendors. Armilla's independent testing, evaluation, and insurance-backed assurance programs help organizations deploy AI with measurable reliability, accountability, and protection against performance and compliance risk. Backed by established partners including Chaucer Group, Swiss Re, Greenlight Re and Axis Capital, Armilla empowers AI pioneers to confidently deploy transformative technology.
For more information, visit www.armilla.ai
MKIII is an embedded lending enablement platform empowering credit unions, banks, and lenders to say yes to more borrowers without increasing risk or uncertainty. Founded on the principle of using technology to improve lending outcomes, MKIII has developed a proprietary Loan Decision Model that uses machine learning to predict loan defaults with precision. MKIII abstracts the entire lending stack into programmable software, enabling financial institutions to lend seamlessly, securely, and at scale while maintaining responsible lending practices. The company's AI-powered platform is backed by insurance guarantees from A-rated carriers, providing lenders with confidence to grow their lending portfolios.
For more information, visit www.mkiii.ai
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