Financial companies agency Moody’s introduced on Monday that it has agreed to amass Cape Analytics, a geospatial AI startup, for an undisclosed sum.
The deal, which is anticipated to shut in Q1, topic to customary closing situations, will give Moody’s entry to Cape’s geospatial AI analytics know-how for insurance coverage underwriting. With the tech, Moody’s plans to create a property database able to delivering “address-specific” danger insights for its insurance coverage shoppers, mentioned Moody’s CEO Rob Fauber.
Cape’s exit comes because the insurance coverage trade ramps up its adoption of AI and predictive analytics applied sciences. A 2024 survey by Conning, an insurance coverage asset supervisor, discovered that 77% of insurers are in some stage of deploying AI, a 16-percentage-point enhance from the earlier yr. By one estimate, the worldwide AI in insurance coverage market might be value $79.86 billion by 2032.
Critics warn that AI know-how might introduce biases and discriminatory decision-making into underwriting. Yet many insurers are forging forward, spurred by AI’s promise to hurry up claims processing and enhance total effectivity.
Suat Gedikli and Ryan Kottenstette based Mountain View, California-based Cape in 2014. Kottenstette was beforehand a senior engineer at BMW, then a principal at Khosla, whereas Gedikli was a analysis engineer at robotics tech incubator Willow Garage.
Through partnerships with geospatial picture suppliers, Cape obtains satellite tv for pc pictures, then applies in-house algorithms to extract structured knowledge, like whether or not a property has photo voltaic panels and the situation of a roof, and rework it right into a structured property data database.
Kottenstette claims that almost half of prime property insurers, in addition to a number of the world’s main banks, use Cape to tell their pricing and underwriting methods.
Cape managed to lift $75 million in enterprise capital from traders together with Formation 8, Pivot Investment Partners, and State Farm Ventures previous to its exit, and the corporate is cash-flow constructive and worthwhile, in line with Kottenstette.
Kottenstette mentioned in a weblog publish that he believes Moody’s, mixed with Cape, can deliver “a a lot deeper set” of options to carriers’ underwriting workflows and “allow a way more full view” of danger. Moody’s prospects can anticipate extra in-depth, property-specific knowledge, Kottenstette added, together with constructing traits, common annual loss estimates, valuations, and extra.
“Moody’s entry to broader, extra numerous data provides us the flexibility to additional broaden and deepen Cape options with the inclusion of further, orthogonal, risk-relevant enter knowledge,” Kottenstette wrote. “Moody’s international scale might speed up our enlargement into worldwide markets, [and its] footprint with monetary stakeholders past insurance coverage carriers could speed up the adoption of Cape’s choices inside the mortgage ecosystem and people of different monetary stakeholders.”
Cape is Moody’s first acquisition in 2025 — and its twenty third acquisition thus far, in line with funding database Tracxn. Cape provides to Moody’s different property-insurance-related mergers and acquisitions, together with Praedicat, a supplier of casualty insurance coverage analytics, and RMS, a local weather and pure catastrophe danger modeling agency.
