Insurance holding company American Financial Group (AFG) has acquired Verikai, a machine learning and artificial intelligence (AI) company, in a $120m deal.
Founded in 2018, Verikai is an InsurTech leveraging alternative data and machine learning to change the way the insurance industry views risk. Focused primarily on underwriting efficiency, Verikai provides insurance companies with risk reports to optimise the underwriting process.
The company’s most recent round of funding was a $6m Series A round in 2020, led by ManchesterStory. Verikai will continue to be led by Jeff Chen, its current president and CEO.
Carl H. Lindner III, AFG’s co-CEO, believes that artificial intelligence and machine learning will continue to have a significant impact on the insurance industry; the group sees Verikai as an “effective leader” in the use of these technologies.
Lindner III added that AFG has been very selective and intentional with its investments in the InsurTech space, and often doesn’t invest directly in InsurTech entities, but Verikai presented an unmissable opportunity.
“Verikai will continue to operate as a stand-alone company to serve its insurance clients. We are also pleased that Great American Insurance Group will benefit from Verikai’s predictive risk tool and unique Marketplace solution as it enters the medical stop loss business, with a primary focus on small and underserved risks.”
The use of machine learning and AI is gaining pace in the InsurTech industry, with many in the industry predicting the rapid adoption of such technologies by leading insurance carriers.
InsurTech Tractable recently partnered with Mapfre to deploy an AI model that uses photographs, taken on a customer’s mobile phone, to carry out an end-to-end, automated appraisal on car claims with low-value damages. The company also partnered with InsurTech Root Insurance to implement its AI solution to help it assess and respond to subrogation demands more accurately and efficiently.
AI could play a key role in streamlining back-end processes, improving efficiency and savings time. CLARA Analytics, which builds AI technology for commercial insurance, released a solution with this aim in mind, to automate workflows for nurse case managers (NCMs) and adjusters.
Global market research company Market Research Future (MRFR) published a research report that revealed AI in Insurance is expanding due to the increasing need to provide customised insurance services.
According to MRFRAI, AI is disrupting every stage of the insurance value chain. Technologies like machine learning, deep learning, natural language processing (NLP), machine vision, and robotic automation have the ability to reimagine the entire insurance lifecycle, from customer acquisition to claims processing.
Machine learning and deep learning algorithms aid in the development of smart, automated applications like healthcare diagnosis, automated data centres, predictive maintenance, customer service, self-driving vehicles, and smart homes, the company explained.
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