American Financial acquires underwriting startup Verikai for $120 million

American Financial Group (AFG) is acquiring San Francisco-based Verikai for approximately $120 million in cash.

Founded in 2018, the around 30-team startup leverages AI technology and alternative data to assess insurance risks. It has raised $6 million in 2020 and is also backed by two insurers – Aioi Nissay Dowa Insurance and National General.

Here’s what Verikai looked like in 2020:

And here’s how it looks today:

“We are thrilled to welcome the Verikai team to AFG. We believe that artificial intelligence and machine learning will continue to have a significant impact on the insurance industry and see Verikai as a thoughtful and effective leader in the use of these technologies. We have been very selective and intentional with our investments in the insurtech space and have enjoyed great success with several strategic relationships. Although we don’t often invest directly in insurtech entities, we found Verikai to be an outstanding opportunity. Verikai will continue to operate as a stand-alone company to serve its insurance clients. We are also pleased that Great American Insurance Group will benefit from Verikai’s predictive risk tool and unique Marketplace solution as it enters the medical stop loss business, with a primary focus on small and underserved risks.” – Carl H. Lindner III, AFG’s Co-CEO.

“My team and I are excited to join AFG. The Company’s financial strength and support will provide the opportunity to grow our business by enhancing our ability to provide a variety of compelling products and innovative capabilities as a stand-alone insurance technology company. We look forward to enriching our offerings for our clients and serving as a leader in the predictive risk space. AFG’s culture and the value it places on entrepreneurial spirit are a perfect fit for Verikai’s vision and ambition.” – Jeff Chen, Verikai’s President and CEO.