Schaumburg's DataCubes sees huge growth in insurance underwriting
The view from the seventh floor Schaumburg office of DataCubes is stunning. There, the company commands a panoramic view of the Busse Woods Forest Preserve and, on the horizon, the Chicago skyline.
That view also speaks volumes about the company's future, which is reaching new horizons in the niche world of commercial insurance underwriting.
DataCubes, has found substantial growth through the development of software systems that has automated the labor-intensive underwriting process. It's four-part solution automates the collection and analysis of data on companies seeking an insurance policy, helping underwriters focus to determine whether a business fits the risk parameters of the insurance agency. An analysis and policy quote can be completed within a day, as opposed to up to 10 days using traditional methods, according to Phil Alampi, vice president for customer engagement.
"The focus is on taking the friction out of commercial underwriting," Alampi said.
Since Kuldeep Malik and Harish Neelamana launched DataCubes in 2016, the company has seen exponential growth. Its client base has gone from three to 30 since the start of last year, Alampi said, and revenues have doubled in the past six months. Clients include The Hanover Insurance Group, Penn National and Selective Insurance Company of America.
And, as a result, the company is growing as well. Alampi said it has 50 employees and will grow to 75 by year's end.
Much of that success comes from being the first to see the underwriting process as an area in need of improvement. Neelamana had been employed at Zurich Insurance when he noticed the amount of manual labor that was still involved in much of the administrative work, which in some cases resulted in human errors, according to Alampi.
"It was one of those things where it's like 'why are we still doing it this way?'" Alampi said. "The best startup ideas come from problems you see around you in everyday life."
Neelamana got together with Malik -- who was already established as a successful entrepreneur -- to develop and market the software package. The four-piece DataCubes solution automatically inputs information from policy applications and other documents; enriches the data with a "data lake" compiled from thousands of public and private databases; automatically answers underwriting questions using specialized models developed through artificial intelligence programs; and develops a risk score to help insurance agents determine if the applicant is a good risk for a policy.
"The net effect on the underwriter is the same staff, in the same hours, can quote a lot more business more consistently and much faster, which lets the carrier grow profitably and provide a better customer experience to the agent," he added.
Malik and Neelamana were also able to grow the company thanks to clients who were willing to try something that hadn't been done before.
"That's how they got their start, by finding people willing to try something different, who were willing to work with an early solution," Alampi said. As a result, DataCubes has gone from having to explain "why we're doing what we're doing to talking about how we are doing it," he added.
The company's rapid growth was boosted in 2017 with a $2.5 million infusion from investors, but Alampi sees the stage being set for another round of investing in the near future.
"Now that the market gets it and the early adopter phase is starting to become real, we need to accelerate," he said.
And while DataCubes has been "focused on one thing and being the best at it," Alampi anticipates others will eventually step into the market it currently dominates. However, he added DataCubes already has a robust database that continues to grow through AI, which opens the opportunity to expand its services into other areas of the commercial insurance industry.
"Insurance is a complicated process, and there are problems even beyond underwriting that can be solved," he said. "Our strength is decision-making, and wherever you're going to have opportunity to make decisions in the insurance process, we'll have an opportunity to solve some problems."