Big data, better policies: How this startup plans to shake up insurance

October 23, 2017

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DataCubes CEO Kuldeep Malik has a bone to pick with big data.

“There are a lot of big data ‘solutions’ out there, but many of these are solutions in search of problems, built without any specific application in mind,” said Malik.

DataCubes is not a hammer in search of a nail. Malik and his co-founder Harish Neelamana, an insurance industry veteran, built their data-driven commercial insurance underwriting platform to address a widening technology gap in the $250 billion commercial insurance industry.

Underwriters are responsible for assessing client risks and exposures to craft and price insurance policies. Despite advancements in technology, the bulk of a commercial insurance underwriter's time is still spent manually hunting down and interpreting data.

“Right now, the process is complex, prone to error and inefficient,” said Malik. “Human underwriters are not bad at their jobs, but they can be much more accurate and efficient if they work with better data that’s culled in a smarter way.”

Datacubes’ D3 platform gleans information from external sources to pre-fill applications. This cuts the amount of time underwriters spend verifying information, and it also makes the application process easier on business owners.

Malik said commercial insurance applications typically have dozens of questions and can take 30 minutes or more to complete. Applications powered by DataCubes average five questions in length, with the eventual goal being to provide a quote using only a person’s name and business address. In addition to reducing the time it takes to complete an application, D3 also tailors prices more specifically to the individual company’s risk profile.

“A business owner might get wildly different quotes from different carriers, largely because, for some business types, there’s not enough information to accurately assess risk,” Malik said. “Business owners are left trying to figure out whether the higher price means better coverage, and in many cases it doesn’t.”

Carriers assess the risk of insuring a business based on a variety of factors, including data drawn from existing policyholders and previous applicants. While this data is valuable, Malik says it doesn’t take into account the fact that businesses and risks aren’t static but rapidly evolving. It also opens the door for price discrepancies as carriers evaluate risk using incomplete data sets.

“When carriers have better information about a business, they can offer a price that reflects reality and customers can understand that this price is based on real information rather than a best guess,” Mailk said.

DataCubes recently raised a $2.5 million Series A, with the funding slated to go toward expanding the capabilities of its platform and hiring. The Schaumburg-based company has a current headcount of 15 employees and is planning to grow its sales and marketing teams in the coming months.

 

Image via Shutterstock.

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