An Interview with Cole Winans, CEO of Flyreel
Empowering home insurance carriers to conduct more home inspections
How do you properly underwrite a home? How do you obtain proper up-to-date information not only on the exterior of the home but also the interior? As an insurance carrier, when do you choose to inspect a home?
These are the questions Cole Winans, CEO of Flyreel, is set on answering. Flyreel is a home self-inspection startup that helps insurance carriers provide more accurate coverage. Home inspections are crucial during the underwriting process but carriers don’t have the personnel to inspect every single home they underwrite. Flyreel’s home self-inspection app enables homeowners to report up-to-date data points (e.g. the existence of a new pool), unlocking the ability for carriers to inspect more homes.
Flyreel recently raised a $10m Series A led by IA Capital, alongside Guidewire, Gradient Ventures, State Auto Labs, and Donan Engineering.
In this interview, we discuss:
- What is Flyreel and how it enables homeowners to capture up-to-date home information
- Flyreel’s ability to expedite and unlock home inspections for insurance carriers
- Where Flyreel sits with respect to its competitors
- Adjacent markets outside of homeowners insurance that can leverage Flyreel’s tech
Enjoy! Here’s the video of the interview. For a cleaned transcript, see below:
Why don’t we kick this off and tell us what is Flyreel. How did you all come about founding Flyreel?
Thanks for having me. For starters, we sell solutions directly to property insurers. We provide an AI assistant that can hold the hand and guide homeowners or business owners through their own property inspections. This helps them better understand the property to make sure that the insurance they’re offering is adequate to protect that policyholder and that it’s priced appropriately.
Today there just aren’t ways to do this very efficiently, besides by sending people out or doing a best guess using third-party data. That’s roughly the problem that we’ve been aiming to solve.
Why don’t you tell us a bit more about why we even do property inspections?
When you’re buying home insurance, you can send someone out to inspect the property.
For the most part, inspections and using data in the underwriting process are used to inform the price that you receive in terms of your premium outlay, but also the amount of coverage that’s needed. If something does happen, you can be brought back to normal and that your property can be restored.
This has been done through broad-based assumptions and risk pools. Because you live in the zip code, we assume you make this much money. You have this much in terms of contents in your home. You’re just like your neighbor. We’re going to give you this coverage, and it’s kind of this close-your-eyes, do-a-best-guess.
Whereas now, we’re afforded the opportunity through technology to know. We don’t have to guess as much. That’s nice because no one’s just like their neighbor. Everyone is paying for insurance, so if something bad happens, it can be fixed. Now, it’s a way to align expectations and to just do a better job at pricing and ensuring people are covered the way they wish and hope they were.
Regarding property inspections, as this has been in the back of my head as I’ve been doing the research: are all properties inspected when they go through the quote and bind process or are only certain properties inspected?
Just certain properties for the most part.
What we’d see across our customers is that usually they’ll look at attributes — maybe the date that a home was built. If it was built in the eighties or earlier, let’s do an inspection. Maybe the plumbing is outdated. Maybe the electrical is outdated. Certain attributes trigger inspections.
What we’ve found, though, is that by having the luxury of seeing inside those homes at a broader scale, those assumptions of “when should we look” are being challenged. They’re expanding the properties that they look at because they can. But typically they’ll take a cohort of their policies and they’ll inspect those ones.
To play some of that back. Theoretically, if you make it easier to do property inspections, you enable insurance companies to do more property inspections.
If everyone could have a thorough interior and exterior inspection of every property they insure, they would love to. But it’s just never been possible until recently.
Why don’t you talk a bit about how the homeowner actually uses Flyreel to model the interior and exterior of the home?
We do both interior and exterior. The typical flow is that they receive an email and/or a text message that says, “Hey, Harry, we need to do an inspection. Download this app. Put in your code.”
It’s going to take 15–20 minutes. From there, they download the app. They put in the code. The app is white labeled for the carrier. A chatbot engages in a conversation with them and we call it the property assistant. The property assistant holds their hand and says, “Hey, Harry, let’s go into the backyard. Oh, I saw a pool, but I haven’t seen a fence. Do you have a fence? Would you mind telling me if you have a self-locking gate and take a photo of that too?”
This chatbot is guiding them through scanning the areas that the insurance carrier needs to see to provide coverage and price it. It’s also reacting based on what it sees or doesn’t see.
If it detects something that we should have a follow-up question about — like a detected pool — that whole conversation is going to change in real-time and adapt just like a human inspector would. From there, the data gets organized in a structured way. It goes directly into the insurance provider’s back-end system to then help them price and determine eligibility.
Before we talk about the various players involved here, how do you all make money?
Every time one of those inspections gets completed, Flyreel earns our business and if it doesn’t get done or it’s not adequate, we’re not charging.
What do you mean by if it’s not adequate?
Some people may start and then never complete it. Only when it’s completed do we actually charge.
Let’s talk about the various stakeholders in the system. You have the insurance carrier and then you also have the homeowner. In theory, the carrier would want to force the homeowner down the funnel in this scenario? Why would the homeowner drop off?
There’s been a lot of uncertainty and less so now about asking homeowners or customers to do anything. If you look at the maturity of InsurTech over the past few years. Initially, everyone was just focused on this one-click-you-have-insurance type of experience. That has its pros and cons. The cons are adequately providing coverage at the right price. The pros are that customers don’t have to do much at all. But it was predicated on this notion that customers want speed over quality and coverage and that they need the fastest experience to be happiest.
What we’re learning now, just through experience (and also COVID helped us learn this) is that homeowners and business owners are willing to be good partners. They’ll give you 15–30 minutes of their time to make sure that their business is protected and that their home is protected.
Early on there was hesitation from carriers about forcing and requiring it because they didn’t want to project work onto the customer. But those customers, after scanning their home, would all say a pretty common question: beforehand, how did my insurance provider know how much coverage I needed and what the price is if they’ve never seen my home? The answer was they don’t really know, and that makes them super uneasy.
Early on, I think people hesitated to use this type of technology. Now they’re far more open. We’re seeing our customers get much more forward and they’re advocating for self-inspection.
In theory, if you have more accurate data, more accurate modeling of the home, you could see people’s rates go up. Do the homeowners understand that when they want to be ultra-transparent? How do they balance that?
The rates go up and the rates go down and the rates stay the same. We see it all. We’ll see discounts because they thought they had more contents than they did. We’ll see rates go up because they found a detached garage that wasn’t accounted for.
In situations where the rates go up, it’s not, “Boom. Here’s a bill.” Our carriers deliver a good experience around this where typically the flow is, “Hey, Harry, we didn’t know you had a detached garage before. To get that covered, it’s going to be a little bit more. You want to make sure that’s covered?” Well, yeah! And so that’s going to be 10 extra dollars or a hundred extra dollars.
There’s typically in the messaging a direct correlation between a price increase and you getting the coverage that you actually want. It doesn’t end up being a negative thing as much as it is in alignment with expectations. You probably already thought this was covered. They didn’t know you had it. Now they do. They’re proactively telling you they didn’t know. We’ve got to adjust the price accordingly.
I really liked that educational component. Because when you have someone at the final quote stage, you don’t want them dropping off. Then, on the insurance carrier side, theoretically, they’re getting more accurate data to better price their policies. How do they know if you’re doing a good job?
Usually what happens is our customers will look to some extent at the reports that we’re generating for them. They come in two forms: we generate a PDF and a report just like an inspector does today, but we also will fill their back-end systems, filling out forms automatically.
With some review, they’ll look at these reports and they make sure that everything is flowing through exactly the way that it should. At this point, we’ve done thousands of these and so the accuracy of our models is very good. We also have a quality assurance step because AI is always only going to be so good.
Do you report holistic metrics back to your carriers at all? Saying, “While using Flyreel, on average your policy prices go down 10%”?
We do provide a pretty robust analytics package. What we’ve learned is when running a self-inspection program, there’s labor and management associated with it. We’ve inherited that for our customers.
You have email distribution, tracking open rates, who gets stalled, do we remind them to pick it up, and how do we coach them through the last part with live-in app support. What we deliver to our customers is an analytics package that tracks everything from invitations to email open and clicks to starting the inspections from when, how long it took them, and what was their review of the process? Were they frustrated? Did they contact support? If so, how many times?
We’re constantly improving that user experience. We have to have ground-truth data to know if we’re falling short somewhere. A good example early on is we would ask people to go into the service area of their home and scan their hot water heater. People would contact support “What is the service area?” We would adjust the language and improve that experience.
In terms of the metrics you were alluding to earlier in terms of the business value, we can’t do that on our own. To provide that data to the carrier, that happens through a partnership.
We surface critical risks and hazards in 30% of the properties that get scanned, and what we’ll ask for is any insight around the last mile of that: What happened from that 30%? Did you re-underwrite or change the pricing? Did you cancel it? What were the results? Our customers share that back with us so that we know we’re delivering value to them. The last thing we’d ever want to do is charge for something if we’re not delivering an access value.
Shifting gears a bit, you all raised a $10 million Series A back in November from IA Capital, as well as, Guidewire. What’s the plan with the new capital? What are y’all looking at over the next one to two to five years?
Early on we were in the stage where we’re trying to prove out an idea. Google’s AI fund, Gradient Ventures, backed our seed financing and helped us pursue that opportunity. Then after we proved out this is a viable idea, we’re going through that scale phase.
What we found, as we went from 6 carriers to 15 to now over 25 across over 30 accounts, is that we’re going through a pretty healthy growth period. That Series A was to support the growth. Now we’ve set up a sales team and we’re building out our business, not just the technology.
Do you have any tips for selling to insurance companies?
Depending on the audience, I would have different tips. We made some novel moves in terms of our staffing, where we brought on our own general counsel and CISO as a startup.
This is when we’re 10 people and that’s absurd in most cases. People don’t have their own attorney in-house. They don’t have their own CISO. When you go through the security requirements and the procurement process with these carriers, satisfying architectural and infrastructural needs for security and also adhering to and reviewing the long MSAs — it makes a lot of sense in that having those in-house functions to accelerate the sales cycle as the upfront process gets compressed considerably.
The other piece is creating those materials in advance. Your security handbook, your policies, and more. A lot of people are making that up as they go and in doing so, they do it 10–15 times as they start to get more carriers. Slow is fast and fast can be slow in that context. Taking some time to methodically establish our stance to expedite that procurement process is a huge advantage.
Backing up one moment because this is a clarifying question: What type of entity do you sell to?
Most of our customers are insurance carriers. We do have some MGA customers. What we’ve learned is that the data that we provide, its value extends beyond insurance. We have some folks in the real estate space and other ancillary or adjacent markets that are now coming on board as customers.
What are some of the other adjacent and ancillary places that you can utilize this tech?
I’ll asterisk this with our focus has been in insurance. We just want to do a great job there before we move anywhere else. We’re now progressing there into other use cases, but in terms of adjacent market opportunities, at the end of the day, what we have in our view is arguably one of the more advanced data capture solutions for property that’s available and will guide you through a full interior and exterior scan that automatically identify attributes, features, risks.
You can see something like that add considerable value in the realm of appraisals, other types of inspections, and even in real estate when it comes to home inspections, mortgage inspections, commercial loan inspections. All of that is definitely within the realm of possibility.
We’re intelligent about when and how we attack those opportunities. Last thing we want to do is compromise our focus and delivery. But we’re pretty excited about the future of Flyreel and where we can go with it.
One of my final topics I want to hit on is: where does Flyreel sit in comparison to other property data capture platforms that exist out there? There are a lot of different sources and they’re all utilized by carriers at different parts of the process.
There are a lot of amazing solutions out there and we play a unique role in that ecosystem. What you’ll see if you categorize them is first, your third-party property data providers. People getting mortgage data, real estate data, county tax record data, and claims history.
Then you have your measurement solutions. You have Hover on the exterior, Planner on the interior, and Matterport doing a bit of the interior, as well.
You get into who’s able to provide the full interior and exterior and that’s where we differentiate ourselves. In addition, we haven’t seen someone detect through computer vision the features, the conditions, or the materials the way we support for the underwriting use case.
Each of those tools has its appropriate use. The bucket we reside in is that full interior, exterior understanding with risks and hazards, materials, objects, and more. That’s how we differ from the other groups.
We did a profile on Hover and they focused on primarily external property measurement. Do carriers see your solution and a measurement solution like Hover or Planner to be mutually exclusive or complementary?
I would say complementary in a number of cases with our customers. They are using a suite of tools. Those are exceptional companies by the way. You’ll see Hover used in claims for exterior, Planner used in claims for interior, and Flyreel used for underwriting and renewal inspections. The carriers do desire a holistic ecosystem where more and more of that functionality resides with a single provider. In any case, we’ve found that it’s complimentary more than anything.
Do you see global expansion plans? Is there anything unique about the U.S. market?
We definitely see opportunities for expansion. We’ve actually gone into Canada already. That was a pretty natural and organic expansion for us. There’s a lot of U.S. carrier overlap with Canada.
There are other areas like the U.K., Europe, Australia and others that I think are great places to go. In the European setting, you’ll see home appliances that have almost like a faux wood covering over the refrigerator. It’ll blend in with the cabinetry, which changes your approach to computer vision.
But for the most part. there’s a lot of those core attributes — wood-burning stoves are wood-burning stoves. When you see them, they present some risk. There’s a little bit of translation required. Canada and Australia have a very similar footprint to the U.S. Gradually I see ourselves extending.
Thank you for doing this interview!
Thank you!
Have any other questions, comments, or feedback? My email is harry@radicleinsights.com. Please reach out 🙏. Would love to hear your thoughts!
