Carpe Data Secures Strategic Investment to Disrupt Insurance Data Market

THL’s strategic investment in the company, announced earlier this week, gives Carpe Data resources and experience to stake a new claim on the insurance data products frontier.

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With Thomas H. Lee Partners’ (THL, Boston) strategic investment announced this week, Carpe Data (Santa Barbara, Calif.) is now poised to be a disruptor in the insurance data products market, according to CEO Max Drucker. THL has invested in a majority stake in the company, with Carpe Data’s founders retaining a significant share of ownership. “This is a perfect opportunity for us to go from being a VC-backed startup to being a disruptor with private equity partners behind us to help us fulfill our full potential.”

Max Drucker, CEO, Carpe Data.

Today Carpe Data has over 40 customers, with an emphasis on Tier One carriers. While the company declines to disclose revenue figures or the amount of THL’s investment, it has publicly mentioned Allstate, Travelers and The Hartford as among its clients.

Carpe Data vetted many potential partners and having many good choices saw THL as the best option, according to Drucker. THL specializes in middle-market growth companies and has over 40 years’ experience working not only with companies of Carpe Data’s size, but also with specific experience in the property/casualty and life and annuities industries. Carpe Data is like other entities THL has invested in as a startup enjoying rapid organic growth, having been built from scratch by founders, according to Drucker.

Challenging Longstanding Incumbents

When it comes to fulfilling Carpe Data’s potential, what Drucker has in mind is nothing less than disrupting the insurance data products market, challenging longstanding incumbents, such as Verisk and LexisNexis. “These companies have been selling the same products for literally decades—that’s what we hear from insurance carriers,” he says. “They want to see new things, companies that innovate, that listen to them, that respond to what their needs are.”

Carpe Data was launched in 2016 and secured its Series A funding in a round led by Aquiline (New York/London) in 2017. That year, Carpe Data secured Allstate (Northbrook, Ill.) as its first major client for a solution to monitor and manage injury claims at scale for an entire book of business. “It was able to corroborate claims, identify exaggeration and abuse of claims for that carrier at scale, in a fully outsourced solution,” Drucker elaborates.

Vaunting a mission of disruption is stock-in-trade for InsurTech entrepreneurs, but in Drucker’s case it wouldn’t be the first time. He was a founding member and CIO of eCoverage (1998), which sold the first auto insurance product online.

Michael DeGusta, CEO, ClarionDoor, and co-founder of Steel Card with Max Drucker.

He later co-founded Steel Card Along with eCoverage CTO Michael DeGusta (now CEO of ClarionDoor), Drucker founded Steel Card, a vendor of web-based core insurance systems to the property/casualty insurance industry. “At the time, there wasn’t anybody else providing web-based software for insurance carriers—the entire industry was client/server or midsized AS/400s and mainframes,” Drucker recalls. In 2006, Steel Card was acquired by Insurity (Hartford), then a Choicepoint company.

Drucker took some time off and then decided to get back to the grindstone in 2010. Having been an early participant in the packaged core systems revolution, Drucker moved onto the data products sphere with the founding of Social Intelligence. That company mined social media data for purposes of pre-employment screening for government entities, as well as for insurance fraud investigations. With Carpe Data, Drucker returned to focus solely on the insurance industry from the standpoint of data product innovation.

While a huge amount of InsurTech investment has been directed at distribution-related and other customer- and agent-facing technology, Drucker believes that data represents the next great frontier in insurance innovation. One reason for that is that insurance has always been a data-driven business.  Insurance companies are the original data scientists; they are the original predictive analytics companies,” he says. “They’ve been using data to predict outcomes for literally hundreds of years.”

Drucker goes as far as to suggest that the focus on front-end capabilities has blinded observers as to the importance of data to some of the insurance industry’s greatest advances in the past couple of decades.

Data Driving the Automation of Insurance

For example, auto insurance is effectively fully automated today. “I don’t think it’s fully appreciated what made that possible,” Drucker comments. “Was it the new core systems? Was it decision-making technology? No. It was the data: the automated motor vehicle report, the automated loss history report, and the automated credit score.”

Carpe Data sought to provide analogous data products to commercial lines insurers with the introduction of its Minerva product in 2019. “Minerva is a data set on small commercial risk, built from scratch, based on various disparate data that’s out there,” Drucker explains. “That includes the online presence of businesses, their social media presence, for the purpose of classifying that business, understanding where the risks are is in that business, and predicting insurance outcomes.”

“What we are setting out to build is the key components to give carriers the confidence they need to be able to issue a small business policy—just like they had the confidence around those three data components in auto,” he adds. “We’re answering key questions with data: ‘What does this business do? Is it a bar? Is it a bowling alley?’ There’s no other data set out there at will tell you restaurants that have deep fryers, or apartment buildings that have swimming pools or the nail salons that do waxing and tanning, or the landscapers that trim limbs. With Minerva, we automate that.”

Minerva itself constitutes an environment for ongoing refinement, as data sources proliferate, but the field is wide open for innovation, according to Drucker. He characterizes the THL investment as “pouring fuel on the fire” of Carpe Data’s innovation efforts. “We are hyper-focused on listening to carriers and responding to their needs,” he says.

Drucker characterizes Carpe Data’s conversations with carrier customers and prospects as having two parts: first listening attentively to what they’re trying to achieve, and then communicating a focus on business impact. “

Listening to Drive Business Impact

the first part of every conversation we have: What are you trying to achieve? This is what we have, this what you can expect to do with that. But the overarching message that we look to communicate with customers is that we’re about driving impact. “It’s about moving the needle,” he says. “We understand that when you’re a $20 billion, $30 billion, 40 billion carrier, a little bit of lift creates a huge impact. We work with those carriers to figure out where we can have the most leverage and drive that big impact. And that’s where we’ve been successful—our ability to listen and work with them.”

Drucker acknowledges that this posture implies product innovation and diversification for Carpe Data. “That’s the whole point of listening, right?” he says. “We are just scratching the surface of what’s possible. This is a landgrab, and there’s no reason for us to reinvent the wheel. There are hundreds, thousands of potential use cases. We are just getting started here.”

Carpe Data Receives Growth Investment from Thomas H. Lee Partners

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at or (503) 936-2803.

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