Israeli startup Windward is entering the marine insurance sector, sources inform "Globes." Since it was founded, the company has engaged in the detection of activity on all the seas and oceans, using over 250 million processed information points daily. The company utilizes satellites and other information sources in order to analyze marine activity all over the globe. The software developed by Windward for processing this information has hitherto been sold mainly to government agencies.
Founded in 2011 by CEO Ami Daniel and VP product Matan Peled, Windward has raised $22.5 million to date from the Aleph fund, Chinese billionaire Li Ka-shing's Horizon Ventures fund, former US CIA director David Petraeus, Start-Up Nation author Dan Senor, former Thomson Reuters CEO Tom Glocer, and others. Former IDF Chief of Staff Gabi Ashkenazi is an advisor in the company, although he has not invested in it.
Sources inform "Globes" that Windward has raised substantial additional amounts in recent months, but the identity of the investors was not disclosed. The company chose not to comment on the new financing round and the identity of the new investors.
The company recently began developing a new growth engine - the marine insurance market. Daniel told "Globes," "We founded the company in order to map what was happening at sea. Using our technology, we succeeded in detecting which ship is doing what. Almost no one has this information, which is helping us generate substantial revenue."
He added, "Eight months ago, we decided to take the core of our capabilities, and offer the information to new parties. We realized that what is useful for governments can also be suitable for marine insurance, because parties in both categories analyze and are concerned about risk factors originating in the sea. It is important to realize how this sector works. If you or I want to get life insurance, they'll check our age, whether we smoke, and whether we suffer from genetic diseases. According to the various characteristics, each of us gets a different premium.
"In marine insurance, when ships and cargoes are involved, the situation is different. The insurers examine the ship, how old it is, and who the owners are, and also what flag it flies. These rules haven't changed for hundreds of years, and now we have an opportunity to offer a change. We can check how the ship behaves, whether it sails in an excessively shallow region for its size, and whether is it making too sharp turns. We can use the information to offer a risk model and decision-making tools for marine underwriters."
Daniel notes that the marine insurance market has a $30 billion annual turnover. Surprisingly, mainly for historic reasons, this entire industry is managed by Lloyds of London.
"There's a big building where people who want insurance for dozens of ships go. We were there three days for meetings. I'm talking about 25 meetings, all of which were held no more than 200 meters from each other. Insurance agents come to this building, just like in the ads broadcast in Israel. The agent comes and says, 'I have shipping companies. I want to insure the entire fleet,' and the insurer has five minutes to decide. This whole process is manual, using pen and paper, just like it was 300 years ago. The insurer asks several basic questions: where are you from, how many ships did you have last year and how many this year, and how many claims you made, and that's it; that's the end of the matter.
"Windward wants to use its information about ships to rate the risk using a mathematical model. Like an insurance company that insures your car and installs Mobileye(NYSE: MBLY) in it, we can know not only how you present yourself, but how you actually behave. For example, if you travel 90 minutes to work every day and I travel seven minutes, your risk is obviously greater. We check profiles of ship captains, how much they sail close to the shore, and look for ships with the worst management," Daniel explains.
Windward has not yet devised the business model for the new service, but the company is likely to charge a certain percentage of the premium, plus a license fee for using the software. "As of now," Daniel says, "there are six-seven times as many requests for insurance than actual policies. For this purpose, the company is making certain changes in its personnel. We believe that with the help of our model for insurance agents, there will be more information, and they will make more deals."
Published by Globes [online], Israel Business News - www.globes-online.com - on May 22, 2017
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