Monetary providers agency Moody’s announced on Monday that it has agreed to accumulate Cape Analytics, a geospatial AI startup, for an undisclosed sum.
The deal, which is anticipated to shut in Q1, topic to customary closing situations, will give Moody’s entry to Cape’s geospatial AI analytics expertise for insurance coverage underwriting. With the tech, Moody’s plans to create a property database able to delivering “address-specific” threat insights for its insurance coverage purchasers, stated Moody’s CEO Rob Fauber.
Cape’s exit comes because the insurance coverage trade ramps up its adoption of AI and predictive analytics applied sciences. A 2024 survey by Conning, an insurance coverage asset supervisor, discovered that 77% of insurers are in some stage of deploying AI, a 16-percentage-point improve from the earlier yr. By one estimate, the worldwide AI in insurance coverage market will likely be value $79.86 billion by 2032.
Critics warn that AI expertise may introduce biases and discriminatory decision-making into underwriting. But many insurers are forging forward, spurred by AI’s promise to hurry up claims processing and improve general effectivity.
Suat Gedikli and Ryan Kottenstette based Mountain View, California-based Cape in 2014. Kottenstette was beforehand a senior engineer at BMW, then a principal at Khosla, whereas Gedikli was a analysis engineer at robotics tech incubator Willow Storage.
By partnerships with geospatial picture suppliers, Cape obtains satellite tv for pc photos, then applies in-house algorithms to extract structured information, like whether or not a property has photo voltaic panels and the situation of a roof, and remodel it right into a structured property info database.
Kottenstette claims that just about half of prime property insurers, in addition to a few of the world’s main banks, use Cape to tell their pricing and underwriting methods.
Cape managed to boost $75 million in enterprise capital from buyers together with Formation 8, Pivot Funding Companions, and State Farm Ventures previous to its exit, and the corporate is cash-flow optimistic and worthwhile, in line with Kottenstette.
Kottenstette said in a blog post that he believes Moody’s, mixed with Cape, can convey “a a lot deeper set” of options to carriers’ underwriting workflows and “allow a way more full view” of threat. Moody’s clients can anticipate extra in-depth, property-specific information, Kottenstette added, together with constructing traits, common annual loss estimates, valuations, and extra.
“Moody’s entry to broader, extra various info provides us the flexibility to additional broaden and deepen Cape options with the inclusion of extra, orthogonal, risk-relevant enter information,” Kottenstette wrote. “Moody’s international scale may speed up our growth into worldwide markets, [and its] footprint with monetary stakeholders past insurance coverage carriers could speed up the adoption of Cape’s choices throughout the mortgage ecosystem and people of different monetary stakeholders.”
Cape is Moody’s first acquisition in 2025 — and its twenty third acquisition up to now, according to funding database Tracxn. Cape provides to Moody’s different property-insurance-related mergers and acquisitions, together with Praedicat, a supplier of casualty insurance coverage analytics, and RMS, a local weather and pure catastrophe threat modeling agency.