Supporting Insurers and Homeowners with Faura - Faura Progress Update #18
Building pilots, product development, and insurance trends
Hey everyone, this is Valkyrie and this is another one of those Faura updates! Thanks for sticking around and let’s just hop right into it.
As we’ve gotten more and more focused on building the product and greater vision for Faura, we’ve started releasing fewer updates (sorry about that, we miss you too) but also talking to wayyyyy more people about how to make things a reality. Here’s a quick synopsis of the last month:
We’re now building for three paid pilots with insurance companies in the New Year! They’re all situated on the West Coast, with the product focused in wildfire and wind-related natural disasters. The goal with these pilots is to work closely with the underwriting team, really tune in our camera function and data collection, and start with a small sample size to get more concentrated feedback.
We went to ITC Vegas! For those of you who don’t know, it’s a massive insurance conference with all the biggest insurtech companies and it really gave us some insight into the greatest trends - the TLDR is that while many companies are focused on the assessment of risk, carriers are leaning more towards actually reducing that risk and what effects that has on their loss ratio.
On the product side, we’re finished with our initial product development stage! Amanda’s been hard at work building out our back-end, breaking apart our front-end into packages and two separate assessment codebases, and having product calls with seasoned underwriters and API professionals from the industry.
Puppy pens at ITC when we needed to take a break - such a great idea and so cute!
I wanted to elaborate a little bit more on what we learned at ITC. I’ve started to realize that risk reduction is something homeowners now have some responsibility for and we, as a collective, made insurance products to support that: with auto insurance, you’re priced based on how safe you drive and penalized for going over the speed limit with a higher premium; with health insurance, you’re priced based on how well you treat your body and penalized for drinking, smoking, eating unhealthily, etc with a higher premium. With homes, however, there hasn’t been that level of variability. Homes don’t change very much.
But with natural disasters, the level of risk does. Every year, advanced mapping and weather events are changing how safe your home is and that continues to vary year over year. To use the same terminology: with home insurance, you’re priced based on how protected you are from natural disasters and penalized for not taking the steps to reduce climate risk with a higher premium (and in a lot of cases, no insurance at all). The only problem here is that we haven’t made products to support that level of homeowner awareness and responsibility, at least not until Faura.
We’re building for the long term data. Insurers need more property-specific risk analysis to better price premiums, and in order to do that and incentivize premium reduction, the trends lean toward getting the homeowner more involved. Departments of Insurance around the country are already starting to mandate that companies take mitigation efforts into account, and as more literature arises in support of dollars spent for risk reduction (like this report that I’ll be making more content on shortly), we’re in a perfect position to offer that data to take action. That’s what we’re most excited about.
And in terms of distribution, there are a ton of MGAs popping up that want to offer more innovative solutions to the insurance problems we’re seeing in California, Louisiana, and Florida! The insurance sector is flourishing with new adoption, something we’re able to take advantage of, especially after this summer. By riding the wave of growth in MGAs and insurtech and offering solutions that both grow profits for the agents and reduce losses for the carrier, we offer a win win win solution.
In general climate and insurance news, more and more people are finding themselves uninsurable. We’ve been reading an awful lot of insurance news and some have asked us about where we find a lot of our information (especially since a lot of insurance data is a well-kept secret; if that sounds like your cup of tea, here’s where we source a lot of it.
We wanted to keep this short since we’re pretty heads down at the moment but wanted to pop in here and say thank you to everyone who’s been supporting us recently! We’re incredibly grateful and are super excited to show everyone what we have coming up, so stay tuned for more updates!
Two more things:
If anyone is attending the Red Sky conference (put on by the wonderful Bill Clerico and Convective Capital for firetech folk) on November 29th, let us know! Would love to meet everyone from the last couple years of growth and see some familiar faces!
And finally, everyone wish Amanda a happy birthday!!!! I’m super blessed to have her as my cofounder and I look forward to spending the next years of our life building something that truly helps people and injects innovation into legacy industries. To the Reddit post that brought us together, to the tiny house, and to Rilakkuma!
