New capital will drive continued global
expansion to bring more insurers into the AI era
SAN
FRANCISCO, Nov. 20, 2024 /PRNewswire/ -- Federato,
the AI-native underwriting platform for insurance, announced today
that it has raised a total of $80
million, including its latest Series C funding round. The
$40 million round was led by global
private markets investor StepStone Group (NASDAQ: STEP), with
participation from existing investors, including Emergence Capital,
Caffeinated Capital and Pear VC, who together represent over
$200 billion in combined assets under
management.
"We have been closely following Federato's rapid growth over the
past five years as an LP in several organizations who have been
investors in the company since inception. Founders Will and
William's deep expertise in AI and their dedication to bringing a
true vertical AI product to the insurance industry is impressive.
Federato's fast-growing customer base is a testament to the impact
they've already delivered," said John
Avirett, Partner at StepStone Group. "We are excited to
partner with Federato as they help insurers innovate on business
models to better serve challenged markets."
Federato's RiskOps platform opens the door to a new era of
underwriting for the industry. Insurers have confronted new
challenges like climate change, cyber crime, and social inflation
over the last decade, and AI is likely to define the winners and
losers in the decade to come. RiskOps is about enabling an AI-first
mindset that makes risk selection faster and more precise, teams
more efficient, and growth more profitable and sustainable.
Federato customers regularly see a 90% improvement in
time-to-quote, 3x improvement in the proportion of good business
bound, and 50-90% reduction in systems used by underwriters. These
improvements across the value chain are fundamental to confronting
these new challenges while staying efficient and competitive.
"When we started with Federato nearly three years ago, we were
impressed by the modern underwriting platform they had built. Since
then, Federato has become the core engine that powers our growth
businesses here in North America.
Today, we are leveraging the RiskOps platform as a unified core
system for the entire policy lifecycle, from submission to quote,
bind, and issue." said Mike Foley,
Chief Underwriting Officer, QBE North America.
As losses have grown more volatile and less predictable for the
insurance industry, the volume of data insurers need to manage has
grown faster than it can be organized and used. The combination of
these forces has led many large players to pull back from
challenged markets, citing a technical inability to effectively
price risk. Federato's AI-native RiskOps approach has been
particularly impactful in helping insurers confront difficult
markets like aviation, commercial trucking, political violence,
wildfire, and hurricane while delivering strong baseline
efficiencies to more traditional markets.
"Velocity is and always has been in the relentless pursuit of a
more efficient operation that can serve the challenged coastal
wind-exposed property market," said Rod
Harden, President, Velocity Risk, an MGA/carrier hybrid
specializing in E&S property insurance. "In order to do that,
we need an underwriting platform that can keep up with the
complexity and speed of our business. Federato has delivered on
those needs and pushed us to constantly iterate and improve on our
processes, driving a 3.7x increase in the percentage of our bound
policies that meet our definition of high appetite."
While Federato already helps thousands of underwriters focus on
the highest-value business across global carriers, MGAs, and
mutuals, this funding will be used to drive Federato's continued
global presence in the UK, Europe,
LATAM, and APAC markets.
On the round and its significance, Will
Ross, co-founder and CEO of Federato said, "We couldn't be
more elated that our investors and customers feel the momentum of
RiskOps in insurance the way we do. We see this financing as a
milestone of continued progress and not an achievement in and of
itself. That achievement lies in the value we are creating each and
every day for our customers and the communities they serve.
Onward!"
About Federato
Federato is bringing RiskOps to insurance to help underwriters
win the right deals, faster. From the moment a submission hits an
underwriter's email or portal, RiskOps puts AI to work, triaging
submissions with a focus on high-appetite business, delivering
real-time feedback on the portfolio, and consolidating workflows
into a single proven system. Federato delivers the transformation
required to drive profitable growth, providing confidence that
teams will stick to the plan, because their unique portfolio goals,
strategies, rules, and appetite are built into the core system
through which they transact business.
About StepStone
StepStone Group Inc. (Nasdaq: STEP) is a global private markets
investment firm focused on providing customized investment
solutions and advisory and data services to its clients. As of
September 30, 2024, StepStone was
responsible for approximately $682
billion of total capital, including $176 billion of assets under management.
StepStone's clients include some of the world's largest public and
private defined benefit and defined contribution pension funds,
sovereign wealth funds and insurance companies, as well as
prominent endowments, foundations, family offices and private
wealth clients, which include high-net-worth and mass affluent
individuals. StepStone partners with its clients to develop and
build private markets portfolios designed to meet their specific
objectives across the private equity, infrastructure, private debt
and real estate asset classes.
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SOURCE Federato