FRISS helps insurers detect fraud at the point of underwriting and claim.
The SaaS platform is a plug-and-play solution which can be integrated with insurers’ proprietary software or offered as an add-on to systems such as Guidewire, Duck Creek, Keylane and Fadata.
FRISS is used by more than 150 carriers across 31 countries, in both personal and commercial lines. The majority of customers are presently based in the EU, although it also has a footprint in North America, Latin America and the Middle East.
Originally founded in 2006, FRISS raised €15m in a Series A round in December 2017 from investors including Aquiline Technology Growth and BlackFin Capital Partners. The funds have been used to invest in its technology and to expand its presence in North America in particular. Jeroen Morrenhof, FRISS’s founder, has just relocated to Chicago.
Central to the solution is the automated generation of a ‘FRISS Score’ – a measure of fraud risk for each quote, policy or claim generated by the application of profiles, predictive models, text mining and link analysis based on data from more than 100 external data sources. FRISS claims its platform has increased its clients’ fraud detection rates by up to 300%.
The majority of traditional insurance customers apply FRISS in the claims process. Digital insurers use it in underwriting also.
FRISS has 140 FTEs and plans to expand to 250 over the next two years.
New developments are focused on developing FRISS’s machine learning capabilities and enhancing real-time, explainable fraud scores with the addition of enhancements including natural language processing, social network analysis and further use of external data.
Revenue is based on a subscription model, dependent on the size of the insurer’s portfolio.
Last week, FRISS held their annual FraudTalks. Some videos of TED-style talks on various aspects of fraud management are available here.
THE OXBOW PARTNERS VIEW
Fraud analytics is hot at the moment: these businesses are arguably the single most important enabler of digital distribution and claims automation. If insurers cannot spot fraud at scale and speed, they cannot eliminate poor quality risks at the point of underwriting and cannot pay claims quickly with confidence. This week German InsurTech, Fraugster, raised $14m in a Series B round led by Commerzbank Ventures.
We think that it is smart that FRISS has made itself available through the large, established core insurance systems.
One of the big challenges in InsurTech over the next period of time is going to be supplier management. How does an insurer manage its relationships with dozens – maybe hundreds – of niche technology vendors along the value chain? Also, how do insurers combine technology propositions from multiple vendors into a customer journey that feels smooth to the customer? Using the core system vendors as both distribution but also, more importantly, a way to simplify sourcing for insurers feels like a wise long-term strategy.
On a related point, one prediction that we have for the next five years is that the technology companies will become much more acquisitive of InsurTechs. They have made surprisingly few InsurTech investments to date – DXC Technology’s investment in 360Globalnet and Guidewire’s acquisition of Cyence are interesting but rare examples.