Flyreel, a startup that uses a combination of artificial intelligence and computer vision to expedite property-insurance underwriting, announced $3.85 million in seed funding Thursday.
Gradient Ventures, Google's AI-focused venture fund, led the round, and the venture arms of the legacy insurance companies State Auto Insurance and Donan also participated.
In an interview with Business Insider, Flyreel CEO Cole Winans said the company’s partnership with Microsoft in February 2018 was a "splashy" entrance but generated more demand than the young company could manage. With additional funds and backing from experts in AI and insurance industries, Winans seems optimistic.
“There's a lot of hype around AI and a lot of people writing '#AI' in their Twitter profile, but very few people have put it into practice in enterprise," Winans said. "The Gradient Ventures team has done that and shown how it impacts your business model and go-to-market strategy. It's great for us to have the domain expertise of the insurance folks that participated."
Read more: Google launched an in-house AI fund to help startups turn sci-fi into 'nonfiction'
Here's how it works: Rather than sending an insurance inspector out to determine a homeowner's policy price and coverage details, Flyreel's technology uses a smartphone camera and its proprietary AI algorithms to assess the risk. The homeowners record what they see, the AI analyzes the recording, and the data gets sent up to the carrier to make a decision.
Winans declined to share which carriers Flyreel worked with outside State Auto Insurance and Donan, but he did say it worked with four of the top 20 carriers in addition to smaller carriers.
"What we've learned is that people will scan their homes and actually wonder how their carrier did" underwriting or inspections previously, Winans said. "They say, 'How did I know I was covered?' There is a huge amount of people that are underinsured, and there's a lot of churn in the market because of this."
Insurance is one of the key industries for customer-data analytics, Winans says. He said that to set rates and understand risk, insurance carriers need to understand as much about their customers as possible. With access to customer behavior and preferences, Winans said, insurance companies can offer more customized plans that share costs better than they do today. He said traditional insurance carriers saw a need for more data to better inform their businesses but didn't always know the best way to process it.
He said Flyreel's AI assistant would "turn on the customer's camera when activated and will document all the details for you and see if bad things are about to happen, like if an appliance is going to fail." He continued: "If we look and see that maybe your hot-water heater is expected to have a year or two before it goes, it's a great opportunity for your insurance carrier to do a few things: They can offer a discount if you opt to upgrade your appliance, or they can send you alerts about water leakage."
Read more: This robotic-accounting startup just raised $18 million, thanks to Google's AI-investment arm
Part of Winans' strategy for the seed capital is better evaluating the types of data Flyreel collects and working directly with carriers to see how that data is best used. Though Winans says he and his team have gotten interest from industries adjacent to property insurance, he said they remained committed to building out the initial service for current and existing customers.
"Our product was in the earliest stage when we announced the partnership with Microsoft," he said. "We really struck a chord and were solving a real pain point in the property-insurance space. It was a real 'holy smokes' moment where we asked how we could service all this interest. So we put our nose to the grindstone to get it in a healthier spot that set us up for this round."
