By: Stephanie Khoo, Tom Brown, and Max Liebeskind
As Insurtech Connect kicks off this week in Las Vegas, we are thrilled to share that Nyca has led the Series B financing in Certificial and that our Partner, Stephanie Khoo, has joined Certificial’s board. We love finding great teams attacking legacy processes in huge industries and giving them the resources they need to drive value for all of the constituents in those industries. Certificial, led by Peter Teresi and Rob Blanchette, is such a company. Peter, Rob, and their colleagues are leading the insurance industry’s transition from static paper or PDF Certificates of Insurance to digital COIs, and we are excited to work alongside them in building the leading solution for their patented digital insurance verification process.
To understand why we are so excited about Certificial, it helps to have a bit of background on the role that COIs play in keeping the wheels of commerce turning. Most contracts between governments, firms, and households in the United States and the vendors that serve them require vendors to have insurance. The COI is the way that a vendor proves that it has insurance to those contracting with it. The number of COIs generated and exchanged each year in the United States is staggering — around 400 million, according to the best estimates. Without COIs, everything from construction projects to concerts to leases to run-of-the-mill business partnerships would fall apart.
The processes currently used to present and track COIs are retrograde. COIs are generally issued in paper or PDF form and are, as a result, static. If a policyholder modifies his or her coverage after a COI is issued, the requestor has no idea, leaving it in the dark about changes to the policy and potentially exposing it to increased risk. Moreover, the processes on which policyholders, agents, and requestors rely to obtain COIs are manual. Some firms employ teams of people to process requests. In some cases, the cost to insurance agents of issuing COIs outweighs the commissions they earn. For example, a small landscaping business may need to provide over 1,000 COIs annually to clients, making the relationship economically unprofitable for the agent. And if the agent that has generated the COI makes a mistake, it faces potential liability. There is also risk of COI fraud or misrepresentation. While national statistics on COI fraud are not readily available, the International Risk Management Institute estimates that nine of ten COIs provided to one client for which it did an analysis had “material misrepresentations or defects.”
The Certificial platform addresses this set of problems with a Smart COI Network™, which provides a superior method for issuing and requesting COIs. The platform streamlines the issuance, access, and delivery of COIs across all parties (requestors, insureds, and agents). It also provides real-time updates so that coverage changes are automatically visible to requestors, thus eliminating the risk of outdated insurance information. In short, Certificial is a win-win-win: for agents, it provides a free platform for easier COI issuance; for insureds, it provides a simpler method for distributing COIs to the parties requesting them; and for requestors, Certificial offers a single platform for handling all COIs, with lower risk of fraud and errors. Certificial also serves as a critical partner to platform businesses in industries such as vendor risk management, logistics, and construction, where insurance verification is a prerequisite for business occurring.
We are delighted to be working with Peter Teresi and Rob Blanchette, who founded Certificial in 2019 and have grown the company from an idea to a significant player in insurtech. Peter’s previous role as CTO of ACORD (the issuer of the ACORD 25 form, the most commonly requested COI form) and CEO of ACORD Solutions Group has put him at the center of changes in insurance verification for over a decade. Rob brings a similar mix of subject matter expertise and customer empathy from his time at Liberty Mutual and as a founder and executive of multiple process transformation and data consulting firms. We think they are the ideal team to help drive the digital transformation of this overlooked but critical piece of the insurance ecosystem.
From new platform partnerships to collaborations with state government insurance regulators, many opportunities lie ahead that will expand the number of parties benefiting from Certificial’s Smart COIs. Businesses and insurance agents that are searching for a better COI solution can sign up to begin using Certificial’s Smart COIs today. The entire Nyca team looks forward to joining Pete, Rob, and the rest of the Certificial team on their journey to create more seamless, transparent and secure insurance verification.