Roots Automation is an ambitious pioneer and challenger committed to revolutionizing the way work is done. They seek to create the most advanced digital workforce by combining machine intelligence and human ingenuity. Andrew Daniels sat with Co-Founder and CEO, Chaz Perera, to learn more about how Roots Automation is impacting the industry.
What is Roots Automation’s client focus?
“Roots works with insurance carriers, brokers, TPAs and MGAs across Life, Health and Commercial P&C - specifically alongside underwriting and claims teams.”
What does your product do?
“Briefly, Roots Automation builds the most advanced AI-powered digital coworker for insurance. Digital coworkers leverage Roots’ proprietary generative AI, InsurGPT™ and the Roots Autonomous Workforce Platform to read and accurately extract data from structured and unstructured documents - such as letters, emails, faxes, ACORD forms - and transform this information into decision-data.”
How much capital have you raised?
“Roots’ has recently raised $22.2 million in Series B funding.”
Was the company born from within or outside the industry?
“I served insurance companies for 15 years, starting in IT and working my way into the business side of the industry. My Co-Founder, John, had a 14-year career in insurance. Subsequent to that, he worked at Mars. He was an underwriter who made his way into IT.”
What growth metrics have you accomplished over the last 12 months?
“We're growing rapidly. Our customers love our product so much that our net-dollar retention was 140 percent last year. Our most recent NPS score was 72 in an industry that's typically around 38.”
Within your domain, what is the current challenge that the industry is facing?
“We exist because most insurance processes rely heavily on unstructured data. A simple example: a submission coming into an insurance carrier from a broker or an agent is typically an email with five or six types of documents. It’s a manual process to read and extract all of the data out of those documents to then be able to rate the opportunity and quote that particular business.
That complexity also exists in claims where the number of documents is exponentially larger than underwriting but with the same challenge. There's critical data in these documents that drive inefficiency from a leakage perspective and processing perspective. All of it is because of unstructured data, and we can solve that problem for insurance companies.”
How does Roots Automation take a unique approach to providing value?
“Unlike many companies that try to solve this unstructured-data problem with people or legacy automation technology, Roots’ solution uses AI – our proprietary insurance domain-specific Generative AI model, InsurGPT(™).
Today, when our customer serves us a document, we don't know what form and format that document is coming in. As a business founded by insurance experts to serve insurance experts, Roots has worked with millions of insurance documents. We have a contextual understanding of those documents and the content within.
As a result, regardless of the format or medium, our AI is to read and classify these documents and extract all the relevant decision data that the insurance company needs to be able to process that activity or action further. Imagine the full submission I described earlier comes in, and within a few minutes, we will have read, classified and extracted all the relevant data that the insurance company needs.
After this, our AI will accomplish one of two things: either returned the document to an underwriter or claims manager in a structured, repeatable and highly accurate manner or a digital coworker will have gone a step further to execute data entry into an insurer’s policy admin system because they don't have a modern API management layer to be able to ingest and process the outputs.
The value of this is that underwriters and claims specialists have greater quantities of decision data for delivering more accurate quotes and paying out claims–and to do this faster than ever before. This allows them to deliver outstanding customer experiences that help fulfill the promise of insurance—to protect what matters most to businesses and to make them whole after a loss.
To deliver on this promise demands that insurance as a business remains profitable. Under present market conditions, this is a huge challenge. In 2023 alone, Property and Casualty underwriting losses amounted to more than $21 billion. One of the main reasons for this lost value is insurers’ struggle to efficiently transform unstructured data into structured data for informing underwriting and claims decisions.”
What inspired the team to start this company?
“John Cottongim, our Co-founder & CTO, and I quite literally lived this pain at AIG in both underwriting and claims. In fact, at AIG, we lived it across finance, HR and IT. We knew the unstructured data challenge wasn’t unique to AIG; it affected our industry as a whole. Approximately eight cents of every dollar an insurance company writes in premiums is lost due to process inefficiency.
In addition, insurers overpay claims by six cents on the dollar. Overall, there's a 14-cent swing driven by inefficient and ineffective underwriting and claims processing. We asked ourselves, ‘How do we enable these insurance professionals to succeed in a world where they're highly burdened by unstructured data?’
Insurance is a relationship game. Perhaps the most critical thing for an insurance company is its people’s ability to engage directly with other parties. To solve complex problems, a broker and an underwriter need to collaborate to find the best solution for the customer. They're trying to price and place, while insureds want to talk about the specifics of a claim and the timing around its payment and closure. If you burden underwriters and claims adjusters with administrative work, it's taking them away from relationship building, which is the foundation of an insurer’s success.”
Can you share any goals for the next 12 months?
“Overwhelming demand from the global insurance market for Roots’ products has led to the need for new capital to support its growth. Roots announced a Series B round of $22.2 million in new funding in September 2024. The new capital represents ongoing commitment from customers and investors and is testament to the value and innovation that Roots brings to the insurance industry. It reinforces the impact it has made since its founding six years ago.
First, we will use this infusion of capital to expand the knowledge and understanding of our industry-leading AI into new insurance use cases to improve our customers' operating performance.
We will invest in our team and their professional growth by striving to solve increasingly complex insurance workflows that require bleeding-edge technology like agentic AI to drive better decision-making.
Lastly, we will expand how we engage and empower our customers by investing in our current go-to-market and customer-facing teams and establishing new partner and channel alliances that enable customers to generate value faster through our AI.
Ultimately, insurance businesses succeed by providing outstanding protection and service to policyholders. This is made possible by underwriters and claims specialists who prioritize productive engagements that help customers ‘win’ with better insurance products and exceptional customer experiences.
We will continue to evolve our product and approaches over the coming 12 months, and beyond, in line with this ethos.”
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