Examples of AI-Based SaaS in Pricing and Claims — Pt. 1 Groundspeed & Shift
Applied AI in insurance goes beyond chatbots and personal assistants. AI’s contribution to backend processes in the insurance industry is significant, especially in pricing and claims management.
Insurers can no longer afford to let massive amounts of unstructured data and manual processes encumber their business. The ones who will continue to do so will inevitably go down for the count in the future.
In the coming weeks, I will be featuring a total of six tech companies that are applying AI, machine learning and advanced data analytics in the insurance industry. With each article, you will get a brief summary of what each company does, who they target and why they do what they do.
Groundspeed Analytics
Background: The company was founded in 2015 by Jeff Mason (Co-CEO), is based out of Ann Arbor, Michigan and currently employs 40 people. The company has recently secured $30m in a series B funding round, led by Oak HC/FT. Andrew Robinson has joined the company as Co-CEO in July ‘18.
“We’re enabling our clients to unlock the value in their unstructured data.” (Jeff Mason, FTP Interview)
What they do: The company is using their extensive P&C insurance expertise, coupled with machine learning “to harvest, normalize, enhance and extract data,” such as loss runs, exposure schedules, submissions and policies.
Valuable data is extracted and labelled at a 98% accuracy rate from mountains of PDFs, Excel files, Emails and images. Clients get access to Groundspeeds’ cloud-based Adaptive Data Pipeline, which is sold as a SaaS solution.
Who is it for: Groundspeed is primarily working with brokers and insurers in the commercial P&C insurance segment. Lower costs, improved efficiency and a better understanding of their book of business are just some of the results clients are seeing.
Brokers get a better view of their underwriting profits, and are enabled to automate reporting.
Insurance carriers are provided with a way to automate submission data capture and Groundspeed can also help accelerate book consolidations.
Both, brokers and insurers, gain significant benefits through simplified client stewardship reporting, a streamlined underwriting submission process and improved analytics for brokers, carriers, and MGAs.
70% of the information that’s processed to identify and understand risk is done in an unstructured or semi-structured file basis. (Jeff Mason, Innovator’s Edge Podcast)”
Why did they start: During an interview with Tech Company News, Jeff Mason stated as the reason for founding the company:
”After running an MGA for fifteen years, I had seen almost every kind of insurance file imaginable. Each time we encountered these files, manual effort was required to extract vital information and analytics was almost impossible.”
To hear a 3min summary by founder Jeff Mason, watch the video below:
If you can spare about 30min, I highly recommend the Innovators Edge Podcast below, where co-CEOs Jeff Mason and Andrew Robinson talk shop:
Shift Technology
Background: The company was founded in 2014 by Jeremy Jawish (CEO), Eric Sibony (CSO) and David Durrleman (CTO), is based out of Paris, France and currently employs 90 people. They’ve also opened offices in Zurich, London, Singapore and Hong Kong. In Q4 ’17 Shift secured $28m in a series B funding round, co-led by Accel Partners and General Catalyst.
“Our SaaS Big Data solution is able to detect and model the weak and strong signals of fraud, including fraud by organized gangs.” (Jeremy Jawish, EP interview)
What they do: Their core product is a SaaS solution called Force, which is based on AI technology that supports fraud specialists “better detect behaviour that is indicative of fraud.” Shift’s solutions also improve the overall efficiency of claims processing.
The key benefit of Force lies in its incredible hit-rate of “more than 2.5x the industry standard,” according to a Blog post by co-investor General Catalyst. The industry is struggling “with a lot of noise from false positive alerts (~25% “hit rate” of alerts that are validly suspicious is industry standard) and insurance carriers can expect to catch just 10–20% of fraud.” All of this, despite massive efforts by armies of fraud fighting specialists and best-practices that have been developed over decades.
Who is it for: Shift’s solutions are primarily geared towards insurers with large volume, general insurance products, such as car, home and health.
One of the best examples to illuminate the interest across the industry, is the fact that the Health Insurance Counter Fraud Group (HICFG) — a UK-based anti-fraud industry initiative with over 30 health-related insurance companies — has chosen Shift to “develop a health insurance counter fraud database.”
Shift’s customer base includes 45 insurers globally, for example Mitsui Sumitomo, and organizations such as the European Anti-Fraud Association.
Why did they start: During an interview with French university École Polytechnique, Jeremy Jawish stated as the reason for founding the company:
“In 2011, as part of our training at École Polytechnique, we did a research internship with Éric in the anti-fraud teams of a large insurance group. We realized that there was a real need for industrialization in this field and that an IT solution integrating real business expertise was required.”
To hear a 10min presentation about the technology by co-founder and CEO Jeremy Jawish, watch the video below:
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