Startup des Monats

Startup des Monats: MOTIONSCLOUD UG

A Cost Cutter for the Insurance Industry   

In search of the best startup companies and the most ingenious ideas for new products and services in the financial sector Stuttgart Financial, Stuttgart Stock Exchange, L-Bank as well as Baden-Württemberg’s ministry of commerce hosted the Stuttgart Fintech Days in December 2017 for the second time. According to the motto “Get finnovative” eight selected startups were brought together with the big players of the financial community.

As the “most finnovative startup 2017” finally MotionsCloud UG stayed ahead of the game. The Mannheim based and Munich operation company has developed an AI (Artificial Intelligence) claims automation engine for motor and property insurance companies to reduce insurance claim processing cost, claim cycle time from days to hours and improve customer claims experiences.

MotionsCloud’s founder is Malaysian born LeX Tan, aged 30, who had worked with several technological Companies in his motherland, before and after he joined an insurance company as a claiming manager in the year of 2007. In this position he learned about the procedure of claims settlements – a process he tried to improve for years, mostly in vain in the company. After five years tried with many disapproval from the management, he finally left the company to pursuit his post graduate education with support of European Erasmus Mundus scholarship award and completed one of the master degrees at Karlsruhe Institute of Technology from 2011 to 2013 in the technological fields.    

Meanwhile LeX and his later Co-founders realized how old school – and thus expensive - the whole insurance sector was acting especially in non-life claims. “We understood that the problem is an industrial one and not only from just one company”, he recalls. According to Insurance European statistic 2016 claims processing cost of EU P&C (property and casualty) insurances pile up to an annual amount of € 24 Billion. Hence insurance companies as well as their the insureds/claimants have experienced time consuming and not transparent claims processes.

On the basis of these considerations LeX Tan and his co-founders Pablo Duy K. Vu (28) and Sereyboth Van (29) worked out the idea of a claims automation engine for P&C insurance companies – which MotionsCloud was founded in 2016. LeX became CEO, Pablo AI director and Sereyboth as a full stack developer became technical director. Basically, the young entrepreneurs’ insurer claims system comprises a mobile claim Web app, an AI pre-assessment platform and a video inspection platform. “Our product is a modular intelligent claims solution that reduces insurance claims processing cost and claims cycle time from days to hours - for the benefit of customers, loss adjusters, claims managers and insurers as a whole”, as LeX states.    

MotionsCloud’s modular intelligent claims solution that is a white label mobile web platform for the insured/claimant is based on damage and claim notification via call center. It includes automation through AI pre-assessment platform with image recognition tech and deep learning tech at the back office of claims department. Automated categorization and repair pricing save a lot of time for claims managers and where appropriate live video inspection for claims manager and costumer is provided. Finally, this leads to fast-track cash or repair settlement.    

“As a result, we reduce claims cycle time from ten days to three hours in average”, as LeX points out. Claims managers can handle much more claims daily than before. The value of the damages is estimated in real-time through the MotionsCloud estimation engine. Thus, manual and tedious claims processes are saved to all involved parties. “Below the bottom line, we reduce claims cost up to 75%”, says LeX. Also, MotionsCloud’s solution lowers fraud through localization and timestamp features. All evidence is stored in a high graded security standard according to EU law, eliminating data privacy issues. Furthermore, the new service improves accuracy and consistency of claims assessment. “And last but not least it leads to a better customer satisfaction and retention rate of insureds/claimants”, says LeX.

As references, MotionsCloud currently serving IMT insurance - regional insurer in the US, Chicago based US insurer, Excon and Expira - German property claims handling companies and a leading eastern European P & C insurer as well as onboarding more clients in the coming months. Furthermore, MotionsCloud is part of W1 Forward InsurTech Accelerator, a program powered by Werk 1, a leading incubator in Munich whose vision is to help startups to grow their idea into scalable business. W1 accelerator is backed by leading insurers like Allianz, ARAG, Generali, Munich Re, Swiss Re and others.

According to German Insurance Association (GDV), the combined ratio in Germany P&C (non-life) insurance sector was 96% in 2015 — which means that German insurers spent almost all of their premium income on claims and expenses and the percentage will often be significantly higher for certain lines of business such as a personal vehicle insurance. According to the Willis Towers Watson Claim Cost Index, the composite insurance inflation rate is actually outpacing the general inflation rate (reference). Through intensive research, LeX learned that between ten and 15 Percent of the average insurer's combined ratio is spent on claims expenses such as claims adjustment. Also, according to Gartner, many insurance companies are still struggling with manual and paper-based back-office processes. With all the facts, MotionsCloud is indeed addressing the insurers needs and its solution can process up to 90 Percent of claims much faster and reducing claims settlement time, which also lead to a significantly higher degree of customer satisfaction — an essential objective of many digital transformation initiatives in the insurance industry.

Von Thomas Spengler, Januar 2018
Bilder: MotionsCloud UG