Our Investment in Knowtions Research
A pervasive problem insurers are seeing across the industry is how to prevent fraud waste and abuse, a problem that is costing insurers billions. According to the research done by the U.S. National Health Care Anti-Fraud Association, there is an estimated four billion in health insurance claims processed annually, around $60 billion is lost due to health care fraud[i]. It is also estimated that two to ten percent of all healthcare premiums are lost due to fraud[ii]. These numbers are astounding and believed to be underestimated.
The problem of fraud waste and abuse didn’t go unnoticed by Co-Founders Anthony Lee and Christian Cai who recognized this gap in the market. The duo decided to found Knowtions Research, an insurtech company that is using Artificial Intelligence and Machine Learning to combat this issue and assist in changing the insurance industry for the better.
Anthony and Christina didn’t begin their careers in insurtech. The pair met while working on undergraduate degrees at the University of Toronto, and decided to build a machine learning platform that translated clinical textbooks across multiple languages. It was while working on this problem that they discovered a larger problem to be solved: how can you prevent fraud waste and abuse in the claims management process for insurers? They recognized that insurers were losing billions around this specific problem and decided to use machine learning to develop a way to help solve the problem.
Our team met Anthony and Christina through an introduction from Jason Brenier, VP of Strategy at Georgian Partners. We understood and recognized the same issue around fraud waste and abuse they were attempting to solve. After some initial meetings and research, we believed that Knowtions was a front-runner in this field and were on the right path with their AI platform Lydia AI.
“As a fund, we believe in investing in vertical-focused AI applications, particularity in financial services to solve core operational pain points in areas such as fraud,” said Dave Unsworth, General Partner. “We believe Knowtions’ approach to be unique and differentiated. The vectors Knowtions utilizes are on the cutting-edge of AI research and will be key to helping solve the pressing issue of fraud, waste and abuse in the insurance industry.”
While Knowtions is still in its early days as a company, both Anthony and Christina have the talent and drive to make a difference in insurtech. “Our generation will live longer but will get sick more often. Insurers need to reorganize around the people they’re protecting,” states Anthony. “Tomorrow’s insurance won’t be bronze, silver or gold plans, but personalized plans that cover individuals based on predicted needs and will include health management as an integrated component of all coverage. Transformations take time, what we [Knowtions] offers is fundamental AI capabilities that insurers can build on overtime to support different business operations. We are beginning to work in claims processing because it produces the data with the most insights on member health and behaviours that are reusable in other places.”
We are delighted to have the Knowtions team join our portfolio of companies, and are looking forward to seeing their evolution. As part of our investment, Dave Unsworth will be joining the board along with trusted advisor Tom Wolf who will join as Executive Chairman. Knowtions will be using the funding from this seed round to continue scaling their AI platform by expanding their team of machine learning scientists and platform engineers.