Fairmatic raises $46M to bring AI to commercial auto insurance

News Summary

  • He’s the founder of Fairmatic, a company that’s applying AI to — at least according to him — reduce risk in the car insurance industry.Matus previously founded Zendrive, a platform that provides insights to enterprises for car insurance underwriting and claims as well as roadside assistance.
  • Image Credits: FairmaticA subsequent report from the California Department of Insurance called out especially problematic recent applications of AI by insurers, including flagging claims from inner-city ZIP codes and using personal information unrelated to risk in marketing and underwriting insurance policies.
  • In fact, he argues, Fairmatic’s reliance on AI generally leads to better outcomes for customers, who’ve historically been stuck with insurers using antiquated data and pricing models.“Fairmatic’s AI predictive risk model has been trained using over 200 billion miles of driving data,” he said.
  • The company uses AI models trained on driving data to attempt to mitigate risk and assist with various policy management and claims processes.Customers get access to an app that they can use to monitor “driving events” — e.g.
  • “Conscious and unconscious bias or discrimination … can and often does result from the use of AI, as well as other forms of ‘big data’,” the authors of the report wrote.Washington and Oregon have sought to ban the use of credit-based scoring algorithms to set auto insurance premiums.
  • In a series of papers, the CAS concluded that biased data — data on which insurers train their algorithms — could perpetuate the discrimination that already exists in the insurance industry.
With inflation sparking an increase in the cost of repairs, labor and claims, fees for insurance are similarly spiking across the board. Car insurance premiums rose 13.7% nationally over the past yea [+6408 chars]