American Family Insurance said it intends to accelerate its use of data, advanced analytics and artificial intelligence (AI) with its purchase of Chicago-based data and analytics software company Networked Insights.
American Family is a Networked Insights client and has been a minority investor in the company since 2013, increasing its investment over time. With the acquisition, American Family became its sole owner. The purchase price is not being disclosed.
The insurer has been investing in technology and data platforms for the past three years including through its own data science and analytics lab, a strategic data analytics division, an innovation team and collaborative data-science projects with the University of Wisconsin.
American Family said it has also acquired HomeGauge, a home inspection software company with 21 employees, based in Asheville, North Carolina.
American Family Chairman and CEO Jack Salzwedel said the Networked Insights acquisition allows it to strengthen its agency distribution and build on its current advanced analytics capabilities to improve how it serves customers.
“These investments are part of our commitment to innovation through the use of data analytics and artificial intelligence for our customers and in ways that complement and improve the personal service we deliver to them,” said Peter Gunder, American Family Insurance chief business development officer, in prepared remarks.
Networked Insights uses artificial intelligence and machine learning to understand what is relevant to people, allowing companies target their audiences with their preferred content and media. A 2015 Networked Insights study of social media posts of millennials found that when millennials share financial concerns online their anxiety decreases significantly even when a purchase or transaction is a completely new experience.
“The insurance company of the future will be all about using data analytics to enhance the customer experience and be a trusted brand,” said Networked Insights founder and Chief Executive Officer Dan Neely, who praised American Family for doing a “remarkable job at building a trusted brand.”
In addition to its Chicago headquarters, Networked Insights also has operations in New York City and Madison, Wisconsin, where American Family is headquartered.
The companies said that Networked Insights will operate as a stand-alone subsidiary of American Family Insurance. In addition to serving its customers, Networked Insights employees will collaborate with American Family data scientists on projects using advanced analytic capabilities to improve customer interactions and business value.
According to the firms, all 74 Networked Insights employees including Neely and Gerry Komlofske (president and chief operating officer) will continue in their positions with the company. Neely will also join the American Family senior executive team.
American Family’s venture capital arm, American Family Ventures, has been active in supporting technology-focused insurance and risk management startups including Ring’s home security system; CoverHound’s auto insurance quoting system; Hover, which creates 3D models of properties; One, a cloud-based insurance payments platform; Leaselock, a rent payment insurance platform; and Katasi, a tool to prevent texting while driving.
American Family is among a number of carriers that have developed service packages for automated home monitoring. Concerning its acquisition of home inspection software firm HomeGauge, the insurer said the aggregate information HomeGauge provides will enable it to enhance its role in this area.
American Family is also an investor in Bunker, a startup digital insurance broker focused on independent contractors.
A year ago, policyholders approved the conversion of 90-year old American Family from a mutual to a mutual holding company, providing the company with the additional flexibility to invest or acquire non-insurance companies or other mutual insurance companies.
The company sells American Family-brand products, including auto, homeowners, life, business and farm/ranch insurance, primarily through exclusive agents in 19 states. Two affiliates, The General and Homesite, also sell directly to consumers over the internet or by phone.
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