The inability to accurately assess risk for insurance purposes is costing the industry a lot of money. Earlier this year, State Farm reported that its property and casualty underwriting business took a $13 billion hit in 2022 due to “rapidly increasing claims severity and significant additions to prior accident year incurred claims.”
Axle is trying to change that. The 1-year-old company developed a universal API for insurance data and is taking an approach of a “Plaid for insurance,” Cameron Duncan, co-founder and CEO of Axle, told TechCrunch.
Many insurtechs solve for insurance distribution and policy administration. Instead, Axle, started by Duncan, Armaan Sikand and Nihar Parikh, provides access to real-time insurance data, automated insurance verification and monitoring of ongoing coverage so that customers, like rental car companies, can reduce their operational costs.
“In the insurance industry today, there is a lot of focus on how we use AI to improve underwriting, but connectivity is where we come into play: How do we interact with the rest of the world?” Duncan said. “Our mission is bridging the gap between insurance and the parallel industries like auto lending, home and mortgages.”
Axle’s products (Image credit: Axle)
Similar to how Plaid leverages a user-permissioned data platform for banking, Axle allows users to connect their insurance account to trusted companies in seconds through a developer-friendly API or one of Axle’s low-code or no-code options.
After launching a year ago, the company is seeing double-digit customer and revenue growth and has grown its carrier network over a hundred carriers.
Now Axle is flush with $4 million in seed funding. The round was led by Gradient Ventures and includes investment from existing investor Y Combinator and participation from Soma Capital, Contrary Capital, Rebel Fund, BLH Ventures and a group of angel investors, including members of the founding team of Plaid and former executives from Cox Automotive.
The co-founders intend to deploy the new capital into additional hiring, expanding its carrier coverage and adding different markets and use cases. There are two growth angles for Axle, including additional lines of insurance, for example, boat, commercial insurance and healthcare, and going horizontal with use cases around other kinds of verification and filing claims.
“Insurance data is extremely complex,” Sikand said in an interview. “Part of our technology is also being the first in the space to really build a standardized way to understand and digest the data.”