Insurtech Startup Debuts with $6M and Proactive Cyber Risk Product
A California insurtech startup with a new cyber product has launched to offer brokers and their clients what it calls “redesigned insurance, with cyber security expertise at its core.”
Mountain View, Calif.-based At-Bay launched out of stealth mode late last month along with the announcement that it has $6 million from a seed funding round led by LightSpeed Venture Partners, with the participation of Shlomo Kramer and LocalGlobe, and that the firm has the backing of The Hartford Steam Boiler Inspection and Insurance Co.
According to Rotem Iram, CEO and founder of At-Bay, the firm is offering a proactive risk management service to go along with insurance coverage. A company that buys a cyber policy will be scanned by At-Bay and monitored for weaknesses that hackers may be able to expose, he said.
“We have expert security researchers who are assessing in real-time how risk is changing,” said Iram, who was formerly the chief operating officer of the cyber security practice for K2 Intelligence.
He said the firm is constantly changing its algorithms to be able to price policies based on how they believe next year’s risk will look for a company instead of relying on past events like traditional insurance models do.
“We believe we’re building the infrastructure for a risk organization for the 21st century to allow us to better understand risk,” Iram said. “The insurance product is only the start of the relationship.”
The Hartford Steam Boiler provides the capacity and paper for the policy, and the product is sold through brokers to clients. They are selling up to a $10 million single-limit comprehensive standalone cyber policy, which has all the elements of standard cyber policy, like data breach, business interruption, financial fraud, extortion.
The firm is starting to offer polices in California, and it’s licensed to sell in Connecticut, Florida, Illinois, Massachusetts, New York, Texas and Washington.
The focus is on middle-market companies with policies from $3 to $10 million in single limits.
Iram said premiums will vary depending on a company’s cyber security measures in place, its software and its risk of an attack, and that the value-added risk management service doesn’t necessarily mean companies will be paying higher premiums.
The firm already has a dozen clients in pipeline, with several policies set to be written, he said.
According to Iram, At-Bay uses software to scan companies “from the outside in,” then offers fixes to potential cyber issues, and supplies experts on demand to help.
The firm has built a “reconnaissance engine” that Iram said is “equivalent to a nation state’s reconnaissance.”
He said this software engine enables the firm to discover vulnerabilities in a manner that’s similar to how sophisticated hackers probe cyberspace for victims.
The reconnaissance engine is “contextualized to find the fingerprint of every company” within information out there on the Internet, he said.
“It’s basically very much like what a hacker would do in the first reconnaissance phase of an attack,” Iram added.
The firm is actively promoting the product to brokers as an “intuitive, digital platform which combines its insurance product with risk insights” to help them start a conversation with their clients on matters like security and financial exposure, and offer case studies and benchmark data.
“We believe that brokers are the key to unlock the value of this for clients,” Iram said.
He said brokers can input the name of a potential client and generate risk scores, and a financial exposure calculator they can share.
The product is free for brokers to use. Iram didn’t offer details on the commission structure, but said it is standard for selling cyber products.
“Market standard commissions for retail brokers,” he said when asked to talk about commissions. “It’s not better or worse.”
Iram said that with the initial research and development phase complete, the plans are to use the $6 million in seed funding to go to market and build up the firm’s sales force.