Tech firm delivers a clear view
of customers’ business activities
Without clear insight into the customer’s business operations,
coverage premiums and terms could fall short.
By Lori Widmer
Right now, in the United States, over 33 million small businesses are operating, according to the Small Business Administration. Of those, 27 million have no employees. From contractors to landscapers to housecleaning services, these businesses all share a unique dilemma—how to be classified by their insurers.
“You may be surprised, but a majority of these 27-million-plus businesses do not have the proper industry classification code,” says Alan Ringvald, co-founder and CEO of Relativity6, a data science software company that helps organizations better classify businesses through AI and natural language processing. “That is to say, nobody is really certain which industry they fall into,” he adds.
Making things more difficult is the fact that many don’t register their industry code with their states, says Ringvald. Those that do “often change or add operations over time. For instance, landscapers can easily transition to tree-trimmers, and carpenters can quickly expand into roofing or framing services.”
For insurers, those transitions make a significant impact on coverage. Without clear insight into the customer’s business operations, coverage premiums and terms could fall short. That’s the problem that Ringvald and his co-founder, Abraham Rodriguez, CTO, wanted to solve.
It started in 2016 at MIT when the two students met while working together on their grad school thesis. Ringvald and Rodriguez were working on solving an entirely different issue. However, that research sparked questions, and those questions drove the development of what is now Relativity6.
One small question
That technology has its roots in a small, almost side question that Ringvald and Rodriguez asked during their grad school thesis work. Looking for a better way to predict the future value of a company, the pair worked with the concept of using advanced machine learning to gather and examine external and internal data on a company to come up with a more accurate valuation. The goal was to bring more accuracy to business activities.
Yet, one question changed everything for Ring-vald and Rodriguez. “Wouldn’t it be interesting to know what the company does from a contextual perspective?” Ringvald said in a recent interview with Ryan Hanley on the Finding Peak podcast.
Without an insurance background, neither Ringvald nor Rodriguez knew how that would apply to companies that would soon be their customers. In Ringvald’s estimation, the need for more insight into a company’s operations is industry agnostic. That is evidenced by how many companies now work with Relativity6 that are not in the insurance industry.
Still, the core clients for Relativity6 are those in the insurance and finance industry. “Relativity6 serves brokers, platforms, and carriers all looking to quickly understand what a company is doing,” Ringvald says. “User cases range from appetite identification, book consolidation efforts, submission pre-fill, and renewal upsell opportunities. Our product is consumed either through our simple API or batch process.”
Eight years later, Relativity6 serves more than 65 insurance customers. “We’ve created a dynamic, self-learning platform specifically built to predict an original six-digit NAICS code of any business,” says Ringvald. “Each original code is created within seconds and is accompanied by a confidence score and specific web links related to that business.”
What users say
For wholesale specialty insurance distributor CRC Group, accurate industry classification is a critical part of doing business. Having clean data was imperative to improving customer results. “We wanted to make sure it was clean data entry right from the outset,” says Chasity Devasurendra, director of digital operations for CRC.
Yet, the first vendor Devasurendra tried had technology that wasn’t delivering the results that CRC was looking for. “We originally started this process with a non-insurance-focused vendor,” she says. “The process that vendor used to gather data wasn’t thinking about it from an insurance standpoint. They looked at NAICs as an add-on data point instead of it being the main focus of the data they return.”
Dissatisfied, Devasurendra looked into Relativity6. From the outset, it was clear that she’d found the right vendor. “Switching from a non-insurance-focused vendor to Relativity6 made a huge difference in the data quality we received.”
So did the speed with which the solution was deployed. “This was the easiest onboarding we have experienced with a vendor. We were up and connected to Relativity6 via API in a couple of weeks. We also did a full book of business upload and received 100,000s of insured’s data back from them within a couple of weeks.”
How has the product improved CRC’s business? Devasurendra says that her company “streamlined our operations, taking away the guess work from a user that may lack insurance knowledge. Relativity6 helped minimize the risk of errors and saved time and effort—eliminating the need for back-end data cleanup.”
Devasurendra says that the in-depth search of the named insured that Relativity6 employs uncovers a wealth of information on that particular person or business. “This can help pinpoint some specialty business that may be excluded from some carriers’ coverage.”
That data and more becomes the basis for CRC’s data and analytics resources. “CRC leverages this foundational data for REDY™ benchmarking reports, REDY pricing index, market recommendations, and so much more.”
Why that matters: “Empowering our brokers with clean and accurate data has a ripple effect across our entire portfolio of markets,” says Devasurendra. “We can confidently navigate without worrying about data inaccuracies. Industry codes have become a crucial connector between submissions and market appetite, fueling our market recommendations tool.
“Our brokers can now assess the most suitable markets for specific risks even before going to market, preventing unnecessary work due to out-of-appetite submissions.”
For agents and brokers looking for a similar solution, Devasurendra has some advice. “Do your own research. Ask yourself what is the goal of the data that you are capturing? What problem are you trying to solve? What reporting or tools are you wanting to create with it? If you can’t answer those questions, determine that before you start looking for a solution.”
She also suggests working with a vendor like Relativity6 that focuses on insurance solutions. “Insurance is a very complex industry; companies outside of the industry don’t understand the importance of the data or how it will be used. That can make the data you get back have gaps for your needs.”
The author
Lori Widmer is a Philadelphia-based writer and editor who specializes in insurance and risk management.
BrokerTech Spotlight offers a look at insurtech offerings from startups that have partnered with BrokerTech Ventures (BTV), a convening platform for brokers, carriers and wholesalers, and tech firms, and includes insight from other BTV member owners.
