Federato, which claims to be the insurance industry’s first ‘RiskOps’ platform that aligns portfolio strategy and underwriting action, has raised $15m in its Series A.
Emergence Capital, a venture capital firm aimed at cloud and SaaS businesses, led the round. Caffeinated Capital and Pear also joined the round.
Several angel investors also committed capital. These include AgentSync co-founder and CEO Niranjan ‘Niji’ Sabharwal and Guidewire co-founder and former CEO John Raguin.
This capital injection enables Federato to accelerate its growth within the North American Property & Casualty and Specialty insurance markets. It will also hire more staff.
Federato claims that its unique approach allows insurers to operationalise underutilised data assets. This includes catastrophe models and cyber security scans. Through this, it hopes to help address the insurance industry’s challenges, including climate change, social inflation and cyber risk.
Its platform leverages learning-based AI to offer a unified view of risk selection data, portfolio strategy, underwriting rules and goals directly within the underwriting workflow. Through this, underwriters are supported indecision making.
According to the Swiss Re Institute, global economic losses from natural and man-made catastrophes were $202bn in 2020 alone. This was up from $150bn in 2019. The industry is coping with the impacts of social inflation, cyber attacks and other risks. This is in addition to misalignment between insurers’ portfolio strategy and underwriting action, manual admin tasks, slow digital adoption and difficulty finding talent.
It claims the RiskOps platform can be implemented within eight to 12 weeks.
During the first half of 2022, Federato grew its ARR by ten-times. It has also increased its revenue by six-times and customers by four-times.
Federato CEO and co-founder Will Ross said, “The reality today is insurers are investing a massive amount of money in data to confront emerging risks, but have very little to show for it.
“Our focus is on putting insurers back in the driver’s seat, helping them operationalize underutilised data investments to meet their strategic goals while enabling them to address the serious social issues facing the industry.”
Emergence Capital recently participated in the $150m Series C funding round of Oyster. The global employment platform joined the unicorn club through the round.
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