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Business Observer Thursday, Sep. 9, 2021 2 months ago

Tampa firm looks to simplify critical insurance barrier through tech

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Behind $20 million in new capital, a high-tech firm targets an unheralded niche in insurance.
by: Louis Llovio Commercial Real Estate Editor

You don’t have to tell John Fohr insurance is a complicated business. He knows it.

He knows companies need to make sure each vendor is properly covered before work begins. He knows a person buying a car can’t drive off the lot after spending an untold amount of money if there’s no proof they are legally covered.

And he knows verifying the coverage in all these tasks often requires sifting through mounds of paperwork. With that knowledge in hand, he started a company to make at least that part of the industry a little bit easier. That new-to-Tampa company, TrustLayer, uses technology to help businesses verify insurance coverages and credentials. That is the information buried deep in the vast number of documents that are a customary part of even the most basic insurance policy.

While it’s not glamorous, that information is crucial in the course of doing business. So crucial TrustLayer has raised $20 million in 2021 and has been on a hiring surge. 

TrustLayer uses robotic process automation and artificial intelligence to automate the verification process, as well as check for licenses and other documents required to be in compliance. According to the American Journal of Intelligent Systems, robotic process automation is “a software that mimics the steps a human takes to complete rules-based, repetitive tasks.”

Think of it this way. If you hire a plumber without the proper insurance coverage and he botches a job, what happens is you are responsible for the damages. So if a company brings on a vendor that isn’t properly insured, it takes on the liability should something go wrong. And that liability could turn out costly.

What TrustLayer has done, says Fohr, co-founder and CEO, is develop a system companies can use to quickly scan for the information needed to determine if the proper coverage is in place and to make sure the coverage meets whatever the requirement is for that particular project.

“With everything that went on last year, it allowed my co-founder and I to kind of pick our head up and, although San Francisco is a fantastic place, it’s not necessary to build a start up there anymore.” John Fohr, co-founder and CEO of TrustLayer

This, he says, helps cut back on the amount of time employees will have to spend manually looking for the information and the ungodly amounts of paperwork the insurance generates. The quicker process, he says, also allows companies to avoid delays as it waits to find out if the vendor it hired can actually do the work.

One more perk? The automated system can help cut back on fraud.

When you buy an insurance policy you know that with it comes a stack of documents, from binders to insurance cards, that breaks down exactly what is covered and documentation that provides proof of coverage. But if you stop paying and the policy is cancelled, nobody comes to take the papers away.

An unscrupulous vendor, car buyer, plumber or contractor can just simply quit paying for the policy but continue to hand over that paperwork. Unless someone verifies it, nobody is the wiser. Until it’s too late.

“When you have paper documents, it’s very difficult to understand if the underlying information is authentic,” says Fohr. “And even if it’s authentic, it’s a huge pain simply just to track and manage that process. You almost have to have full time people dedicated to this.”

Fohr and Vincenzo Acinapura founded TrustLayer in San Francisco in 2018. Fohr had experience in insurance and had seen the need to automate firsthand and to digitize the process. Acinapura brought technological skills.

Earlier this year, TrustLayer moved part of its operations to Tampa, where it's focusing its growth over the next year. It's currently working out of space at Embarc Collective, a non-profit startup hub in the city. The company has 20 employees in California and has hired about 20 locally, with plans to continue adding staff in Tampa this year.

Fohr says TrustLayer was attracted to Tampa because of both the growing startup culture and the large number of insurance companies and brokers in the area, including industry giant USAA.

“With everything that went on last year, it allowed my co-founder and I to kind of pick our head up and, although San Francisco is a fantastic place, it’s not necessary to build a startup there anymore,” Fohr says. “The whole world has become comfortable with doing things over Zoom and Tampa, for us, happens to have a lot of insurance expertise.”  

To help fund its growth, TrustLayer announced in August it had raised $15.1 million in Series A funding. This goes along with $6.6 million in seed funding the company announced in February. Officials decline to release revenue projections.

The funds will go toward the development of a live digital proof of coverage solution and integrating with insurance carriers, as well as hiring employees in sales and engineering.

Fohr says the company is already working with several large insurance carriers and brokerage firms. That includes BrokerTech Ventures, a group of 13 insurance agencies and 11 insurance companies in the U.S.

“What’s different with us,” he says, “is we’re working with the biggest players in the insurance industry, as partners, and we have their backing, and support, to find a solution to what is nothing short of one of the biggest (problems) in the insurance industry, a trillion-dollar industry.”

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