Pay-per-mile auto insurance start-up Metromile announced earlier this week that it had secured $90 million in a round of funding led by insurance industry titans Tokio Marine Holdings and Intact Financial. With so much capital in hand, Metromile plans to expand now from the eight states it currently operates in to all 50 states, a strategy that was put on hold until the company became a full carrier in 2017.
“Now that we have the infrastructure in place, we’ve spent a lot of that time building the technology for claims and for customer experience,” said Metromile CEO Dan Preston. “The ultimate objective now is to allow that capital to both fund the R&D, and the growth to get to that next level of scale for the business.”
The auto insurer uses AI technology to power its claims process and relies on sensors, which are becoming more widespread, for its pay-per-mile model.
“The reason Metromile exists is that the world is becoming full of sensors,” said Preston. “A lot of the reason why there’s so much hassle and pain and time involved in handling a claim is that insurers basically are trying to figure out what actually happened, so there’s all those manual processes associated with asking questions, determining what happened in the accident because in 99% of cases, there’s no independent witness – you’re solely relying on the people who are involved in the accident to tell you what happened.”
With sensor data, it’s easier to back up what customers say happened following a crash with physical evidence, which in turn means claims can get instantly approved in a process driven by automation – good for customers and their carriers.
“If we can make that experience truly delightful and make it so that someone can get their claim handled instantly, we end up seeing a much stronger customer relationship in the end,” explained Preston.
Whether it’s through telematics or other technologies breaking into the market thanks to the work of insurtechs, change is coming to the insurance sector, according to Preston.
“I think there are a number of technologies that are creating opportunities to change the fundamentals about insurance,” he told Insurance Business. “One of those that we leverage is the ability to capture data in real-time to change pricing models, customer experience, operations, but there are also opportunities in distribution for instance that we’re seeing a lot of insurance companies go after.”