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Cytora, a UK startup that has developed an AI-based solution for corporate underwriting, has raised £ 25 million in Series B. EQT Ventures leads the investment, with investor participation existing, Cambridge Capital Innovation, Parkwalk, and a number of angel investors anonymous.
Cytora was founded in 2014 by Richard Hartley, Aeneas Wiener, Joshua Wallace and Andrzej Czapiewski – although Wallace and Czapiewski have since left.
Its first product was launched in late 2016 for a number of large insurance customers, with the goal of applying AI to commercial insurance based on various public and proprietary data. This includes the building's building characteristics, the company's financial data, and the local weather conditions badociated with the insurer's internal risk data.
"Commercial insurance underwriting is inaccurate and inefficient," said Richard Hartley, co-founder and CEO of Cytora. "This is inaccurate because underwriting decisions are made using scarce and outdated information. It's inefficient because the underwriting process is so manual. Unlike the purchase of a car or travel insurance, which can be purchased in minutes, the purchase of an insurance company can take up to seven days. This means that the operating costs for the insurers are extremely high and the customer experience is not good, which leads to a lack of confidence.
To illustrate how inefficient commercial insurance can be, Hartley says that for every pound of premium paid by a company to insurers, only 60 pence is set aside to pay the total claims. The other 40 pence evaporates as "friction cost of insurance provision".
Powered by AI, Hartley claims that Cytora is able to summarize the subscription process in seven days up to 30 seconds via its API. This allows insurers to programmatically subscribe and create workflows for faster and more accurate decisions.
"Our APIs are powered by a risk management engine that learns subtle patterns of positive and negative risks over time," he says. "This gives insurers a better understanding of the underlying risk of each company and helps them to set a more precise price. Clients and insurers benefit. "
Typical Cytora customers are commercial insurers who digitally transform their underwriting process. Software users are either underwriters in insurance companies that incur significant business risks (ie, an average insurance premium of £ 500,000 or more), or professional clients of insurance companies. who buy online insurance with an average premium of £ 1,000 to £ 5,000.
"For customers, our customers built quotation workflows in addition to Cytora APIs, allowing homeowners to purchase fonts online in less than a minute without having to fill out a form," says Hartley. "We only need a company name and a postal code to issue a quote, which revolutionizes the customer experience."
To this end, Cytora generates revenue by charging annual ARR license fees, which increase based on usage and operations. The company said today's B-Series funds will be used to accelerate the expansion of its product line and expand to new geographies.
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