Soteris Exits Stealth with $8M Seed to Boost P&C Insurer Profits via AI

Soteris, a YC-backed machine learning company for the P&C insurance industry, today announced the launch of a new product that helps carriers and MGAs make more money, often millions more, from their current distribution network, without any change to rates, forms, filings, or headcount.

Soteris's first product, which helps insurers improve their loss ratios, has been live with carriers and MGAs since 2020 and has scored over 100 million policy submissions totaling more than $180 billion in premiums to date. Today, the company is stepping out of stealth for the first time, unveiling its new AI profit optimization product, which is specifically designed to directly target an insurer’s bottom line, alongside results from its work with existing customers.

Soteris has raised over $8M in seed funding, led by Spider Capital, with participation from Intact Private Capital, Amplify Partners, DCVC, the Webb Investment Network, and Overlook Ventures.

Insurance is one of the only industries in which the producers don't know their cost of goods sold until well after they've sold their product. Because the outcome of any individual policy is binary, insurers have long only been able to analyze results by aggregating policies into "segments" based on like characteristics, treating any variation within a segment as random noise. Soteris’s method generates millions or even billions of analyses, effectively making each policy a credible “segment of one.”

Implementation for an insurer takes under 90 days, and once live, Soteris delivers its insight at any point in the policy lifecycle — either when a policy is quoted, when it’s bound, or at any point after — in under 250 milliseconds via API.

"Every insurer knows they're writing policies that will lose them money. They just can't find those policies with the resources currently at their disposal," said Sunit Shah, founder and CEO of Soteris. "That's the blind spot we built Soteris to close. For the first time, an insurer can look at a single policy and know exactly what it's worth, in time to act on that information."

The company has run several proofs of concept for insurers, where it has seen book EBITDA increases of between 70% and 125% — meaning an insurer could more than double its bottom line by using Soteris’s new product. “That’s a tremendous amount of value already sitting inside insurers’ books, just waiting for them to retrieve it. And once they do, they can invest those gains back into their own operations to both reduce prices and improve the overall experience for their customers,” Shah added.

"With his rare combination of finance, insurance, and quantitative experience, Dr. Shah is uniquely positioned to crack the toughest mathematical problems in insurance," said Minsoo Chi, Partner at Spider Capital. "Soteris already moved analytics from segment averages to policy-level expected loss. Extending that same resolution to predicting profit generation is the natural next step."