Bitesize Impact 25: Carpe Data
June 8, 2018 Chris Sandilands
Carpe Data uses public data to help insurers with claims and commercial underwriting. The company now works with over 40 insurers across the US, Canada and the UK and have ongoing pilot projects and tests with over a dozen others. Several of these projects are in the UK, a market the company entered in February this year.
Aquiline Technology Growth led a $6.6m funding round in May 2017. This has allowed Carpe Data to more than double its headcount to 40 people and open a base in Hartford, Connecticut. A London office is planned for further European expansion later this year.
Growth, we are told, has been strong.
Claims
Carpe Data’s most used product is Claims Activity. Primarily focused on bodily injury and casualty claims, this solution uses a variety of publicly available data sources to corroborate claims information, enabling insurers either to fast-track payments or to flag exaggerated claims or opportunistic fraud.
If the system detects a discrepancy between the claim and publicly available online activity, it flags it to the carrier as something to investigate further. An example may be someone claiming back pain following a car accident but also showing up in the results of a local 5k race.
It is relatively easy to measure the financial benefits of claims technology. Carpe Data says its customers have seen an average 10x ROI on claims costs thanks to quicker payments and detection of exaggerated claims.
Commercial Lines
Carpe Data provides two additional solutions aimed at improving risk assessment and reducing friction in the new business process for SME commercial lines by using publicly available data.
On Demand Data, enables carriers to obtain Carpe Data products in real time. These products include:
- Basic demographic and firmographic data useful for pre-fill and which enable search and verification of more complex data products
- Deeper attributes of a risk with a confidence level based on source, context, and data science prediction of presence
- A suite of indices targeting dimensions of risk, tuned by segment and location, which clean and normalise data that can be sparse, noisy, biased, unstructured, or redundant
- Predictive scores, for example the likelihood of a business having a loss within the next 12 months
The benefit for the insurer’s SME proposition is twofold. First, the business owner doesn’t have to fill out a lengthy form. Second, it helps insurers find suitable products for their customer. “Rather than getting SMEs to apply for specific covers, we can propose covers based on their business needs,” says Geoff Andrews, Co-Founder and COO.
On Demand Data’s largest successes to date has been with consumer-facing businesses such as hospitality, retail, leisure and beauty salons with up to 100 employees.
Carpe Data uses AI, computer vision and natural language processing with a myriad of data sources to find out more about the business. For example, it can tell if a restaurant sells alcohol or has a deep fat fryer without needing to ask or have an underwriter research it themselves online.
Their Book Monitoring solution uses the same data to monitor an insurance carrier’s entire book of in-force policies to monitor for changes in customers’ risk profiles. For example, Carpe Data can alert the insurer if a restaurant has begun to offer new services such as external catering. The insurer or broker can then have a conversation with the customer about the changed risk profile.
Book Monitoring could also be used to speed up renewals as less information will be asked of the business owner.
The commercial lines solutions are being piloted by several carriers in the UK.
The Oxbow Partners view
Carpe Data is playing in an interesting but competitive market. Amongst the InsurTech community, Impact 25 Members Cytora are competing on risk analytics, Digital Fineprint (last weeks’ Bitesize) on customer acquisition data, and RightIndem on claims analytics. But there are also significant incumbents.
This is particularly true in the UK where digital fraud detection has been a life-or-death requirement for insurers ever since price comparison websites pushed the market to its current low-margin online model.
But not-to-paraphrase Gordon Gekko: competition is good. It suggests demand. Now the objective for insurers should be to work out how they can create incremental advantage from these new sources of data and techniques.
The question on everyone’s lips is, of course, what impact the recent issues around data are having on business models such as Carpe Data’s.
Whilst tight-lipped on the sources of its data, Geoff was keen to emphasis Carpe Data goes to great lengths to ensure compliance with regulatory and privacy requirements. “We’re very aware and conscious of the dos and don’ts around privacy,” he says. “We only process data where there is a legitimate reason to do so. This isn’t about social media. It’s about new and publicly available data.” Before entering the UK, Carpe Data engaged counsel to make sure its operations would comply with GDPR rules.
