Generative AI Insurtech Sixfold raises US$6.5 Million in Seed Funding
Generative AI Insurtech Sixfold raises US$6.5 Million in Seed Funding
Generative AI looks set to revolutionise risk assessment for insurers as innovative insurtechs like Sixfold raise the interest of investors
AI

Generative AI looks set to revolutionise risk assessment for insurers as innovative insurtechs like Sixfold raise the interest of investors

Sixfold, a pioneering, New York-based startup using generative AI to streamline the insurance underwriting process, has successfully raised $6.5 million in seed funding. 

The funding round was led by Bessemer Venture Partners and included Crystal Venture Partners, according to exclusive information shared with Semafor.

Sixfold’s innovative software allows its customers, such as Builders and Tradesmen’s Insurance Services (BTIS), to upload their own underwriting manuals and proprietary data. The system then employs generative AI algorithms to analyse the data and provide recommendations to underwriters as they review new applications.

Generative AI to play significant role in insurance over the next decade

The news follows on from new market reports that suggest the Global Generative AI in Insurance Market size will be worth $5,543.1 million by 2032 from its current size of $346.3 million, and growing at a CAGR of 32.9% through the next decade. 

The insurance market is undergoing a remarkable transformation, thanks to the exponential growth of generative AI technology. Insurance providers are harnessing the power of artificial intelligence to optimise their operations, improve risk assessment models, and deliver personalised customer experiences. The revolutionary capabilities of generative AI, which generates new and valuable information, are poised to reshape this industry sector.

The expansion of the generative AI market in the insurance industry can be largely attributed to its significant impact on operational efficiency. Insurers are increasingly adopting AI algorithms to streamline critical processes such as claims processing, underwriting, and policy administration.

By automating these tasks through artificial intelligence, generative AI plays a crucial role in enhancing operational efficiency. Furthermore, the ability of generative AI to generate fresh data empowers insurers to make faster and more informed decisions, reducing the need for manual interventions and ultimately improving overall operational efficiency.

Generative AI is reshaping insurance by enhancing risk analysis, pricing, and customer experiences. It leverages historical data to improve pricing accuracy and optimise risk management strategies. By detecting patterns and improving fraud detection, generative AI provides precise risk assessments through simulation models. It also utilises customer data to deliver personalised recommendations and tailored offerings, enhancing satisfaction and retention. This transformative technology drives performance and customer-centricity in the insurance industry.

Sixfold uses Generative AI to assess premiums and risk

Sixfold aims to streamline and expedite the underwriters’ task of interpreting disparate sources of information.

For example, if a roofing contractor seeks insurance coverage from BTIS, Sixfold’s software can reference the company’s guidelines, indicating that insuring roofers poses higher risks compared to painters. Based on this analysis, Sixfold can suggest that the underwriter offers a higher monthly premium to the roofing contractor.

“Our platform offers recommendations to underwriters based on their own rules,” explains Alex Schmelkin, CEO and Founder of Sixfold.

He continues: “To start, Sixfold will focus on one of the most intractable challenges in insurance: the inefficiency of underwriting. Underwriting is an art form, requiring human-level pattern recognition to capture all of the things that go into understanding a complex risk. For years, insurers have struggled to extract clear rules and standards for assessing risk because there has simply been too much information. Insurance carriers have a “front-door problem”: because of how manual and time-intensive the underwriting process is, insurers can’t provide quotes on all of the opportunities that come their way.”

Why new Generative AI will be the ultimate transformative tool

Schmelkin says prior attempts at AI in insurance haven’t gained much traction because they took a “black box” approach. “These failed attempts need way too much data and haven’t produced consistent results. Instead, we’ve trained generative AI models to “understand” all of this information and assist humans with the manual assessment. With the Sixfold Assistant, underwriters will be able to quickly evaluate and rate all submissions, thus improving underwriters’ capacity as well as the accuracy and traceability of their decisions.

“Today, the Sixfold Assistant is best positioned to eliminate a lot of the “grunt work” that underwriters deal with on a daily basis: tracking down information from third parties, poring through thousands of pages of documents, and making sense of unstructured data. Sixfold will serve as a co-pilot to underwriters, plugging into existing technology so insurers don’t need to overhaul legacy systems in order to take advantage of Sixfold’s capabilities.

He adds that the software also incorporates data from external partners like BuildZoom, a platform that tracks millions of building permits across the US. This additional information enables Sixfold to flag instances where a roofing contractor has frequently obtained permits for electrical work, adding valuable insights to the risk assessment process.

Join Sixfold at Insurtech Insights USA 2023 in New York

You can join Alex Schmelkin of Sixfold at Insurtech Insights USA 2023 on June 7th and 8th at the Javits Center in New York. He is an expert speaker on our panel: Generative AI from Theory to Practice: Real World examples of AI in Underwriting. You can register for the conference here:

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