The insurance industry has long been driven by the need to assess risk accurately. Traditional methods relied heavily on advanced mathematical models and statistical data, but they often lacked real-time data insights. Questions such as “Is the risk of fire at a restaurant with a pizza oven higher than one without?” or “Is a driver under 25 at a greater risk of an accident than one over 60?” were assessed using statistics, not actual data insights about the business or individual being insured.
However, the big data revolution of the last decade has transformed how insurers assess risk. For the first time, they can underwrite policies based on real-time data specific to each business they insure. This is particularly important for improving loss ratios, which are a major challenge for insurance companies. Lowering the loss ratio, even by just a few percentage points, can significantly enhance an insurer’s profitability. Advanced technology, grounded in real-time big data and enhanced by generative AI capabilities, can significantly improve these ratios. This shift is exemplified by the recent acquisition of our portfolio company Planck, a leader in AI-driven data science, by Applied Systems, one of the world’s largest insurance software providers. This acquisition is a clear indicator of how far the data revolution has advanced within the insurance industry.
The Game Changer: Bringing AI to Insurance
Founded in 2016 by industry veterans Elad Tsur, Amir Cohen, and David Shapiro, Planck set out to revolutionize commercial insurance underwriting through AI and data. Their deep expertise, particularly in AI, allowed them to introduce groundbreaking products that addressed critical industry pain points. These innovations not only improved underwriting efficiency but also set new standards for accuracy, enabling Planck to secure clients like AIG, Chubb, Allianz, and Sompo.
A significant part of Planck’s success is its ability to address the insurance industry’s need to improve loss ratios. By leveraging real-time big data and generative AI, Planck has empowered insurers to enhance underwriting precision, thereby directly impacting and improving loss ratios, which are crucial to the profitability and sustainability of insurance companies.
With the recent leaps in AI technology, particularly the rise of generative AI and large language models in the past couple of years, Planck once again positioned itself at the forefront of industry innovation. By launching GenAI-enhanced models, they delivered unprecedented accuracy and efficiency in underwriting, empowering underwriters to better navigate big data, classify businesses, and detect risks. This capability is a significant leap forward in modernizing legacy insurance operations, making the industry more efficient and responsive to real-time needs.
Reaching Global Recognition
The acquisition of Planck is more than just a business deal; it’s a recognition of the company’s unparalleled innovation on a global scale. Applied Systems’ decision to fully integrate Planck’s products, while maintaining its entire team and operations, underscores the strategic value they see in Planck’s real-time data insights. This integration will provide insurers with a more comprehensive and accurate view of business risks, enabling better-informed decisions, improved loss ratios and optimized operations.
As investors, we are particularly proud of this outcome. We backed Planck’s B-round in 2020, driven by our conviction in their vision of modernizing insurance underwriting with AI. The journey wasn’t without its challenges, including navigating the global financial downturn. Yet, Planck remained steadfast in its mission, adapting to the industry’s evolving needs, particularly with their recent GenAI-enhanced offerings.
This acquisition also marks a significant achievement for the Israeli tech ecosystem. Applied Systems’ first entry into Israel, through the acquisition of Planck, establishes a local development center dedicated to advancing AI-based solutions. Planck’s founders will play pivotal roles in this expansion, with Elad Tsur taking on the role of global Chief AI Officer at Applied Systems.
Israel’s Rapid Rise in AI
While it is true that Israel was initially somewhat late to the latest AI revolution, the country’s rapid advancement in this field is now unmistakable. Israel has quickly closed the gap and, in many ways, is setting new standards across various AI-driven industries. The country’s deep expertise in technology and innovation, coupled with a thriving startup ecosystem, has propelled it to the forefront of AI development globally.
Planck is a prime example of this trend. The company’s success in applying advanced AI technologies to revolutionize the insurance sector underscores Israel’s growing influence in the global AI landscape. Moreover, Israel’s ability to innovate and lead in AI, even in highly specialized and complex industries like insurance, demonstrates its capacity to not just catch up, but to become a world leader in the field.
This growing dominance is further solidified by international recognition and investments, as global players increasingly turn to Israeli companies for cutting-edge AI solutions. As Israel continues to nurture talent and foster technological advancements, we believe the country’s emergence as a global AI powerhouse will mirror its leadership in cybersecurity, positioning AI as the next defining pillar of Israel’s tech dominance.
