The insurance industry is losing money due to its inability to accurately assess risk. State Farm reported earlier this year that its property and casualty underwriting business would take a $13 billion hit in 2022 as a result of “rapidly increasing claims severity and significant additions to prior accident year incurred claims.”
Axle is attempting to change this. According to Cameron Duncan, co-founder and CEO of Axle, the two-year-old company developed a universal API for insurance data and is taking a “Plaid for insurance” approach.
Many insurtech companies provide solutions for insurance distribution and policy administration. Instead, Axle, founded by Duncan, Armaan Sikand, and Nihar Parikh, provides real-time insurance data, automated insurance verification, and ongoing coverage monitoring to customers such as rental car companies, allowing them to reduce operational costs.
“There is a lot of focus in the insurance industry today on how we use AI to improve underwriting, but connectivity is where we come in: how do we interact with the rest of the world?” Duncan stated. “Our mission is to bridge the gap between insurance and related industries such as auto lending, home loans, and mortgages.”
Axle, like Plaid, uses a user-permissioned data platform to connect users’ insurance accounts to trusted companies in seconds via a developer-friendly API or one of Axle’s low-code or no-code options.
Since its inception a year ago, the company has seen double-digit customer and revenue growth, as well as expanded its carrier network to over a hundred carriers.
Axle has received $4 million in seed funding. Gradient Ventures led the round, which also included existing investor Y Combinator and participation from Soma Capital, Contrary Capital, Rebel Fund, BLH Ventures, and a group of angel investors that included members of Plaid’s founding team and former executives from Cox Automotive.
The co-founders plan to invest the new funds in additional hiring, expanding carrier coverage, and adding new markets and use cases. Axle has two growth paths: adding new lines of insurance, such as boat, commercial insurance, and healthcare, and going horizontal with use cases centered on other types of verification and claim filing.
“Data assurance is extremely complex,” Sikand explained in an interview. “As part of our technology, we were also the first in the space to create a standardized way to understand and digest data.”