{"id":7390,"date":"2019-10-31T16:49:04","date_gmt":"2019-10-31T16:49:04","guid":{"rendered":"https:\/\/fintech.global\/digitalwealthtechforum\/?p=7390"},"modified":"2019-10-31T16:49:04","modified_gmt":"2019-10-31T16:49:04","slug":"insurtech-100-company-planck-explains-how-underwriting-is-getting-updated-to-the-21st-century","status":"publish","type":"post","link":"https:\/\/fintech.global\/digitalwealthtechforum\/insurtech-100-company-planck-explains-how-underwriting-is-getting-updated-to-the-21st-century\/","title":{"rendered":"InsurTech 100 company Planck explains how underwriting is getting updated to the 21st century"},"content":{"rendered":"

Insurance is changing and\u00a0Planck<\/a>\u00a0is leading that change through its platform which automatically and accurately assesses risk factors in real time.<\/strong><\/p>\n

Elad Tsur, Amir Cohen and David Schapiro founded Planck in 2016. Tsur and Cohen had previously launched and spearheaded the growth of the data mining company Bluetail until it was acquired by Salesforce in July 2012. Before joining Planck\u2019s founding team, Schapiro had clocked time as the CEO of data analytics company Earnix for almost a decade.<\/p>\n

Planck is named after the physical constant in quantum mechanics and has quickly grown to become one of the world\u2019s most promising InsurTech scaleups. It specializes in scraping and analysing huge datasets to quickly and accurately help insurers in their underwriting endeavours.<\/p>\n

\u201cThe better we can assess risk, the better it is for everybody,\u201d says Omri Yacubovich (pictured), vice president of marketing and business development at Planck. \u201cConsumers will pay the right premium, avoiding cross-subsidizing higher-risk policyholders, and insurance companies can grow new business while reducing loss ratios. It\u2019s not utopia, but a reality for carriers that work with us.\u201d<\/p>\n

Having launched the new venture in 2016, the team spent the better part of the following three years developing their minimum viable product. In July 2018, Planck launched its platform for multiple insurance products and business lines. Since then, the scaleup has expanded its offering on a monthly basis.<\/p>\n

Not only were insurers pleasantly surprised by how quickly the company\u2019s solution could answer many questions, but they were also amazed by the data\u2019s accuracy. \u201cThey had never seen an equivalent performance,\u201d Yacubovich says.<\/p>\n

Of course, insurers had already recognized the need for a solution like Planck\u2019s. \u201cCarriers have already identified the need to provide their customers, especially the small- and medium-business segment, with a much better customer experience and faster quoting and onboarding processes,\u201d Yacubovich says. \u201cCarriers also acknowledge the limitations of the existing system using standardization, such as ACORD forms, as well as the limitations of self-declared submissions.\u201d<\/p>\n

He explains that the underwriting process has long been a time-consuming one, fraught with frustrations. Firstly, it involved the submission and quoting process from both clients and insurers. Secondly, the existing method usually relied on flawed or incomplete data. Thirdly, the underwriting process was often based on one-size-fits-all questions that could fail to encompass individual clients the way bespoke solutions would.<\/p>\n

\u201cIn order to overcome the existing obstacles, carriers need to gain access to accurate and up-to-date data to justify the cost of the process compared to the earned premiums, especially in the SMB sector,\u201d Yacubovich continues. \u201cThe good news is that the data is out there, and companies like Planck that are experienced in dealing with big data and artificial intelligence are already helping carriers gain a competitive advantage, allowing them to grow their [slice of the] pie by entering categories that were less profitable in the past, provide a better user experience, reduce underwriting expense ratios and improve overall loss ratios.\u201d<\/p>\n

So how can modern solutions provide greater flexibility to the underwriting process? In Planck\u2019s case, it starts with the underwriter, an agent or a customer simply entering a business name and address. \u201cThe business name could be a DBA, [doing business as]. It could be a registered name. It can be anything that describes the business,\u201d Yacubovich says.<\/p>\n

He adds that Planck has built a proprietary technology that allows it to identify the business even with partial or typo-riddled information.<\/p>\n

Once the client has entered a business\u2019s name and address, Planck\u2019s technology crawls through thousands of open web data sources to find out everything it can about the company. \u201cAnything that\u2019s out there,\u201d Yacubovich says, \u201cwe scrape the internet and we get all the relevant data for that specific entity.\u201d But that\u2019s only the beginning of the process.<\/p>\n

But having the data is not enough \u2013 insurers must be able to consume it in a way that provides them clarity about the risk and allows them to action it. And that\u2019s where the processing and insight creation phases kick in. The scraped data is analysed through a combination of image processing, natural language processing, unstructured data analysis and other artificial intelligence technologies. \u201c[Through that,] we\u2019re able to extract valuable information out of the various data pieces,\u201d Yacubovich says.<\/p>\n

For instance, a selfie taken in a restaurant may be enough to find out whether the establishment has smoke detectors or sells hard liquor, or if the floor looks particularly slippery. Having information like this could, for example, empower underwriters to more accurately assess the risk of injury in a dancing area in a bar.<\/p>\n

Once extracted and analysed, the data is taken through the third phase, which is where Planck\u2019s technology creates the insights underwriters need. \u201cWe use deep learning algorithms that we train based on gold data, as in data already proven to be 100% accurate,\u201d says Yacubovich. \u201cSo, we can train our algorithmic model to find the truth from all the different data pieces that the system has processed. During the third phase, the system takes all the extracted information and then creates the truth per field or per question that we are trying to address.\u201d<\/p>\n

Traditionally, underwriters also conduct their own online research. However, Yacubovich explains that these findings and the subsequent analysis may be biased. Comparatively, Planck\u2019s technology can scan all the data available to the public. \u201cBut instead of asking hundreds of questions or dozens of them, which would take hours to complete, and even more to be validated by the carrier, that can be completed within seconds,\u201d Yacubovich continues.<\/p>\n

With better information, Planck envisions benefits for carriers and customers alike. \u201cThe immediate upsides are more accurate quoting and lower pricing for the lower-risk policies,\u201d he says. \u201cI also believe that such a future will change the nature of underwriters\u2019 work. Artificial intelligence alone won\u2019t be able to achieve it, but I believe that underwriters, just like smart detectors, will provide the artificial intelligence with possible input, such as predictors they identified in a particular case.\u201d<\/p>\n

And when they do, the algorithms become smarter too. \u201cThe artificial intelligence that wasn\u2019t trained for that particular example will evaluate the actual attribution of that factor and make a decision about whether to include it as part of the risk assessment model,\u201d Yacubovich continues. \u201cFurthermore, it will search for additional look-a-like predictors to further enhance its relevance and accuracy.\u201d<\/p>\n

Planck\u2019s technology also enables insurers to quickly react if a customer\u2019s risk profile changes. This enables smoother and more streamlined renewal processes by minimizing low-value-add data activity, allowing the underwriter to focus on new risks, coverages and exposures.<\/p>\n

The way Yacubovich sees it, solutions like Planck\u2019s will fundamentally transform the insurance industry. \u201cIn the future, carriers will underwrite and define pricing based on risk types and the overall probability for each of the policy\u2019s related risks, given the known and unknown factors combined with the deviation from similar businesses, so they don\u2019t need to identify and evaluate any particular field or potential predictor based on generic standards or their own experience,\u201d he says.<\/p>\n

\u201cFor example, the risk of robbery could be related to operational hours, but also to the amount of cash or valuables stored in the business and possibly even to the proximity to certain other businesses or institutions. Also, the overall reported crime in the area can contribute to the predicting model, and so forth. I believe that down the road, instead of asking generic questions about the hours of operation and valuables or cash stored in the business at any given time, the carrier will be able to receive specific, customized risk probabilities and use those to price and issue quotes.\u201d<\/p>\n

The InsurTech scene has grown tremendously in the past six years. In 2014, the global industry attracted $504.7m, according to\u00a0FinTech Global’s data<\/a>. By 2018, that figure had jumped to $3.48bn only to skyrocket to $3.72bn in the first three quarters of 2019 alone. With so much money being spent on innovation in the industry, one must wonder where that leaves underwriters.<\/p>\n

\"\"<\/a><\/p>\n

Yet, Yacubovich doesn\u2019t think underwriters need to look for new jobs any time soon. \u201cWe\u2019ve seen this shift in many other industries,\u201d he says. \u201cEven in traditional industries like farming, instead of seeding, planting and watering based only on the farmers\u2019 knowledge and experience, farmers have started using mechanical vehicles and equipment that do the same much more efficiently and accurately. Nowadays, farmers are using IoT devices to get even more accurate and profitable. However, they are still farmers.<\/p>\n

\u201cThe technology advancement hasn\u2019t replaced the need for a farmer to define how much water each seed requires at different times of the year or the exact time to seed a plant in a certain type of soil. It has enabled them to be better at what farmers have been doing successfully for centuries, at larger scales.\u201d<\/p>\n

Speaking of the future, what is next for Planck? Having launched only three years ago, the company has already set up shop across two continents. But it is just the beginning. \u201cRight now, we\u2019re laser-focused on growth and covering more insurance questions,\u201d Yacubovich concludes.<\/p>\n

Copyright \u00a9 2019 FinTech Global<\/p>\n","protected":false},"excerpt":{"rendered":"

Insurance is changing and\u00a0Planck\u00a0is leading that change through its platform which automatically and accurately assesses risk factors in real time. Elad Tsur, Amir Cohen and David Schapiro founded Planck in 2016. Tsur and Cohen had previously launched and spearheaded the growth of the data mining company Bluetail until it was acquired by Salesforce in July… <\/p>\n

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