Data is the lifeblood of the insurance industry, enabling more accurate risk assessment, personalized pricing, and improved claims processing. Harnessing unstructured data allows insurers to gain deeper insights into customer behavior and emerging risks, leading to more innovative products and enhanced decision-making capabilities. Roots Automation is an AI-powered platform that leverages LLMs to process unstructured data as well as deploy adaptive digital workers that can be used to optimize both claims processing and underwriting. The digital coworkers come equipped with a foundation of common knowledge, skills, and capabilities relevant to insurance operations and they are able expand their expertise in real-time, without requiring additional training or development. Designed for ease of use, Roots Automation features a no-code interface, making it accessible to users across various technical backgrounds. The platform prioritizes security and integrates smoothly with existing systems, ensuring a seamless transition The efficiency gains are substantial – a single digital coworker can handle the workload of ten human employees. This dramatic increase in capacity translates to improved profitability and reduced loss ratios, with benefits visible from day one of implementation.
AlleyWatch caught up with Roots Automation CEO and Cofounder Chaz Perera to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
This was a $22.2M Series B funding round. Harbert Growth Partners led the round, with follow-on investments from MissionOG, Liberty Mutual Strategic Ventures, and Vestigo Ventures.
Tell us about the product or service that Roots Automation offers.
Unstructured data trapped in everyday correspondence – including broker submissions, legal demands, and medical records – constitutes around 80% of all data across insurance. The inability to effectively harness this data for decision-making costs insurance companies $100B annually due to underpricing premiums, insurance fraud, and overpaying claims.
Additionally, the overreliance on human power and the legacy technology to extract this unstructured data manually diminishes the quality of customer experiences and worker job satisfaction — leading to a whopping 50% talent exodus within 10 years.
To address all of this, Roots Automation created the most advanced AI-powered Digital Coworker. Digital Coworkers leverage Roots’ proprietary generative AI, InsurGPT, and the Roots Autonomous Workforce Platform to transform unstructured information into clear, actionable insights. This allows insurance leaders to make faster decisions with greater confidence.
Digital Coworkers are pre-trained on millions of insurance data points and come packed with knowledge, skills and capabilities to:
Receive, classify, process and index insurance documents (e.g. demand letters, policy documents, submission packs, ACORD forms, emails, etc.)
Reason and infer to make optimal, ethical and trustworthy decisions in the context of a business process or workflow
Interact with buttons and data on a computer screen and transact data across business applications and systems
Collaborate with people using natural language – able to be coached and trained to improve knowledge
What inspired the start of Roots Automation?
Six years ago, Roots set out to solve the unstructured data problem that insurers, third-party administrators (TPAs), brokers and agents all face.Insurance has always been a data-driven industry, relying heavily on data for risk assessment/pricing and claims management. By performing these essential functions, insurance delivers security and stability to customers.Insurers succeed by providing outstanding protection and service to policyholders—both made possible by underwriters and claims specialists who have the capacity to prioritize productive engagements that help customers “win” with better insurance products and exceptional customer experiences.Some of the data used in insurance is structured and organized into standardized formats, e.g., ACORD forms. However, over 80% of data leveraged across the industry is unorganized and highly variable, locked within reams of paper, email and attachments. This information is categorized as unstructured data.Unstructured data permeates communications channels across critical decision-making documents, including loss run reports, statements of value (SOV), questionnaires, underwriting supplements, line slips, policy documents, legal demand letters and medical records.Processing unstructured data consumes up to 40% of the average working day. On the underwriting side, receiving, accurately pricing, and responding to a submission faster than the competition improves the customer experience, which can make the difference between dramatic growth and a shrinking top line.On the claims side, incorrectly entering a policyholder’s name will incur rework, while incorrectly identifying a demand in a multiple-page demand package can result in litigation. Such outcomes result in slower claims payments to policyholders and higher loss ratios.Many insurance organizations have tried using technology to transform unstructured, natural language information into structured data. However, most return to human-power to overcome.And so, Roots Automation was born. To harness and unlock the value held within unstructured data and to liberate people from manual data processing through advanced AI.
How is Roots Automation different?
Roots stands out due to our vertical focus on the insurance industry. Our deep insurance experience and AI expertise enable leading insurance brands to excel in their markets and concentrate on what matters—delighting customers with better insurance products and exceptional customer experiences.
We have developed a strong, defensible position in the market through technological advancements in our proprietary AI, which continually outperforms people-centric solutions and other AI solutions in speed, accuracy, and trustworthiness.
Our AI is trained on millions of non-public documents. By applying an industry vertical focus, our AI is equipped with the skills and knowledge of documents, systems, and workflows commonly found in insurance. It is able to make better decisions faster, dramatically improving the speed to value for customers. With our proprietary AI and federated learning models, we ensure that we significantly improve the speed, accuracy, and performance of the underlying AI every day.
What market does Roots Automation target and how big is it?
Key vertical: insurance market
Unstructured data represents $1.6T in lost revenue (conservatively $100B in insurance alone)
What’s your business model?
We have a SaaS – Subscription-based model.
How are you preparing for a potential economic slowdown?
Roots Automation is in a solid position because it is well-funded and has a strong and growing roster of customers. From a customer perspective, should an economic slowdown occur, they are already leveraging our AI across various use cases in claims and underwriting and will continue to realize a strong return on their investment. We plan to increase the number of use cases across the insurance space, further increasing interactions between customers and our AI, ensuring even greater value for them.
What was the funding process like?
It was very positive. Our AI solution has proven results within the insurance industry, so our objective was to ensure we found the right mix of partners to scale the product within the industry while aiming for a broader focus when the time was right. We achieved that.
What are the biggest challenges that you faced while raising capital?
Ensuring our investment partners were aligned with our mission and values and believed in our vision.
What factors about your business led your investors to write the check?
Proven product-market-fit
Strong financial growth
Market-leading technology
Strong leadership team
What are the milestones you plan to achieve in the next six months?
Greater focus on customer success: working closer with customers to ensure we continue to deliver value and delight, with each interaction.
Expansion across all departments in the organization: supporting additional use-case coverage, new partner and channel programs, and customer acquisition in new regions (market expansion).
Scaling and accelerating R&D into cutting-edge AI development: Expanding our proprietary multi-modal capabilities and agentic models.What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Be myopically focused on as few things as possible, particularly where/how you drive customer value. Perfect that. It will allow you to make better decisions about where to invest your capital.
Where do you see the company going now over the near term?
As mentioned above, we expect to continue growing our business, including deepening our involvement in insurance operations, expanding into new regions, and rolling out new partner and channel programs.
What’s your favorite fall destination in and around the city?
l’abeille, Greenwich St. in Manhattan.
