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A fast-growing startup is winning over big auto insurers like Geico by using artificial intelligence to speed up car repairs

  • Auto insurers are using artificial intelligence to speed up damage assessments after accidents.
  • British AI startup Tractable signed a deal with major US insurer Geico to generate damage estimates.
  • Tractable, founded in 2015, will hit breakeven within 2-3 years, cofounder Adrien Cohen said.
  • See more stories on Insider’s business page.

Automotive insurers are using artificial intelligence to speed up car repairs for customers, with Berkshire Hathaway-subsidiary Geico signing a deal with UK AI startup Tractable.

Tractable, founded in 2015 by a British team of computer scientists, has trained its systems on photos of damaged cars, and now promises its AI tech can give initial, accurate damage assessments to help car owners get their vehicles back from the repair shop faster.

Its technology builds on the rise of deep learning and earlier breakthroughs that now enable AI algorithms to “see” and recognize objects.

Geico, which has 17 million policyholders in the US and is the second-largest auto insurer in the country, is set to use Tractable’s tech to process the millions of claims it receives each year, the two firms said Tuesday.

Body shops will submit images of damaged vehicles alongside estimates to the insurer for approval. Tractable’s system will analyze the severity of the damage and either approve the estimate or flag up discrepancies to human assessors. The idea is to make the process less subjective, and make it easier for insurers and repair shops to agree on costs.

Tractable and Geico have not disclosed terms of the deal. Geico CEO Todd Combs said in a statement the firm was helping it review estimates faster and more accurately.

While Geico is using Tractable’s AI to approve body shop costs, other insurers use its tech for initial cost estimates at the beginning of the claims process. Tractable will rely on local data providers to estimate prices of parts and labor costs in that instance, a spokesman said.

Tractable also works with US insurer The Hartford, as well as firms in Japan, the UK, France, and Spain, and predicts that the use of artificial intelligence in insurance will become the norm. A spokeswoman for British insurance firm Ageas, one of Tractable’s first clients, told Insider that its partnership with the startup had evolved from a pilot in 2017 to a fundamental part of how the firm processes claims.

The company wasn’t always focused on car damage, Tractable cofounder Adrien Cohen said, initially exploring the fields of dermatology, pipe corrosion, or “any visual task that requires expertise.” 

“We realized the car accidents was an amazing space to specialize in because you have hundreds of millions of claims everywhere,” Cohen added. “You have a lot of data — insurance companies, body shops have taken photos of damaged cars for decades — so you can really train to reach human performance, and you can bring value to the process.”

The firm plans to expand into home insurance, specifically around wind damage.

Tractable says it has trimmed its burn rate while growing topline revenue, despite COVID-19 lockdowns resulting in a fall in traffic and a subsequent decline in accidents. The company’s business model is “software as a service”, generating revenue from clients who sign up for subscriptions to its platform.

Cohen predicted the firm would break even within two to three years, and indicated the firm was in the process of raising funding to help its expansion.

“We don’t need to play the tech game of raising tons of money and buying your growth — our Series C was only $25 million,” he said. “We’ve really been able to contain our losses despite hypergrowth.”

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