Applied Systems announced the acquisition of Cytora, a digital risk processing platform for the insurance industry, in an effort to accelerate connecting the dots within the insurance ecosystem, something Applied terms as the “Digital Roundtrip of Insurance.”

“At Applied, we are committed to being the leading specialist in insurance AI solutions for both agencies and carriers,” said Taylor Rhodes, CEO, Applied Systems, in a statement. Cytora is the ultimate example of insurance-focused AI, according to Rhodes. “Their commitment to leveraging advanced AI capabilities to accelerate and streamline the digitization, exchange, and prioritization of risk data between agents and carriers fits perfectly with our vision of the Digital Roundtrip of Insurance,” he said when releasing the news.

Cytora’s platform is an insurance focused generative and agentic AI model that digitizes commercial risk transfer workflows. New business submissions are one area where Cytora’s digitization can speed up the risk review process, said Graham Blackwell, president of Applied Systems.

Related: By Taming Big Data With AI, Cytora Aims to Transform Commercial Underwriting

For example, information for a new business submission might be captured and then turned into a PDF. “And where does that PDF go? Well, it gets emailed to 10, 12, 15 different insurers so they can evaluate the risk,” Blackwell said. “And what do they do? They take that information, key it all in manually. They plug into their underwriting workbench so they can decide if they want the risk,” he explained. That process takes a lot of time, he said. In addition, “we have found that 30%, 40%, 50% of the time in that process the carrier never returns a quote … it’s too much work. It’s too much cost, and they simply don’t get back to the agency. They don’t get back to the insured,” he said. “What a terrible experience for everybody,” Blackwell said. “The carrier is not actually underwriting the risk that they want. The insured doesn’t know the status of their [insurance] quote and the agency is just chasing people down.”

Richard Hartley, co-founder and CEO of Cytora, told Insurance Journal that the combination of Applied’s scale with Cytora’s ability to improve the process and control over risk selection, is a game changer. There is a huge opportunity in the commercial insurance industry to improve the workflow process from submission to binding, he said. AI can help.

“The insurance industry is really inefficient in how brokers send risks to insurers,” he said. “If you are writing commercial insurance, 40% of your time today is absorbed by reading and interpreting submission data.

“These are highly skilled underwriters who really should be making decisions on risks. But what they are actually doing is spending 40% to 50% of their time just manually reading and interpreting in a very monotonous way.”

Hartley says the Cytora platform uses large language models, artificial intelligence, to digitize that information automatically.

“It dramatically speeds up and streamlines that process, really benefiting agents and brokers, but also really benefiting insurance companies because they can write higher volumes of risk,” Hartley explained.

Hartley said Cytora’s vision for the future of the industry directly aligns with Applied’s vision to connect and automate the Digital Roundtrip of Insurance. “We are excited to join Applied to significantly expand the value of insurance AI at each stage of the risk lifecycle, bringing the industry closer together and enabling more profitable growth for all stakeholders,” he said.

Cytora is a configurable platform so it can be used to digitize the full policy lifecycle – from submission to claims servicing, mid-term adjustments, endorsements, and renewals, the release said. “Cytora’s document-to-data platform enables users in both agencies and carriers to reduce the time and cost incurred in the most critical insurance workflows in radical ways.”

This includes turning information from disparate data sources – both structured (e.g., ACORD forms) and unstructured sources (documents, PDFs, Excel and CSV files, emails, images), into decision-ready transactions fulfilling each participant’s view of risk, the companies said.

The goal is to create a dynamic back and forth experience for the industry, Blackwell said.

“No one is keying in information. There aren’t all these emails and phone calls back and forth. There aren’t all these logs,” he said. Blackwell expects that the future will include building out more of Cytora’s AI capabilities to other areas where better interactions between insurance partners are needed.

But it’s a proven AI platform as it is, Hartley added. It’s “ready to use and is flexible across all lines of business, all transaction types and workflows from new business to renewals to midterm adjustments, to claims to invoices and many others,” Hartley added. “And it’s also completely flexible and configurable to each insurer’s view of risk.”

It’s an exciting time in the insurance tech world, he added. Because it takes the workflow relationship from what seems like “a black hole” where agents and brokers might be asking, “‘Did you receive the submission? I haven’t had a response,’” Hartley said. And turns that “black hole into this really highly interactive form of communication, which I think is really sympathetic to how agents and underwriters want to do business today,” he added.

“The result of this combination will unlock growth and create significant productivity for all stakeholders in the industry,” Applied’s statement said. “Our collective technology assets, insurance domain expertise, and vast insurance data sets – combined with the power of AI – will deliver speed, accuracy, and cost advantages across all the critical workflows involved in the insurance lifecycle.”

Insurance Advisory Partners LLC acted as exclusive financial advisor to Cytora in this transaction. Terms of the deal were not disclosed.

Topics
Mergers & Acquisitions
InsurTech
Data Driven
Artificial Intelligence