Atidot Ltd., a provider of data analytics tools for the life insurance industry, is emerging from stealth mode today after raising $5 million in an early-stage funding round.

The Series A round was led by Vertex Ventures with participation from existing investors D.E. Shaw Group, Moneta Seeds and Bank Hapoalim.

Atidot is something of a niche product, aiming to use new technologies such as artificial intelligence, machine learning and predictive analytics to help life insurers and annuity writers become more efficient and profitable. The basic premise is that its software helps these companies make better decisions based on the data they currently have on their customers, and also data from outside sources.

The company said its main aim is to help life insurers estimate “customer value” so they can make better decisions around client development, retention, underwriting and pricing. Its product works by digging up as much data as possible on each customer from both internal and external sources.

The data is then carefully analyzed to build up a clearer picture of their predicted behavior. With this data, life insurance firms can then adjust strategies accordingly, by pursuing upselling or retention for specific customers, for example.

Atidot analyzes two kinds of data. The first is what the company calls “open access information,” which refers to information that is public and accessible to anyone, Dror Katzav, chief executive officer of Atidot (pictured), told SiliconANGLE. This includes data such as the average income for a specific profession or the median house prices of a geographical area. With this data, insurers can create more exact profiles based on aggregated data, Katzav said.

“For example, what is the average salary for teachers living in are code 11111?” Katzav said. “Insurers are not looking to create detailed personal files on their clients, more to get a better idea of who they are. Being able to utilize this information can significantly assist life insurers with their pricing mechanisms and provide a service that is attuned to the needs of their customers.”

Katzav also talked about “neglected sources of data,” which is data held by the insurers themselves that’s not usually accessed. He said that in many cases, once an individual takes out a policy they rarely hear from their insurer again. But someone who takes out a policy in their 20s probably requires an altogether different kind of policy 10 years later, Katzav says, since they’re likely to have made big changes to their lives, advanced their careers, gotten married and started a family.

“Being able to look at the data the insurance company naturally collects has the potential to help identify significant life changes,” Katzav said. “When a policyholder updates an insurer regarding a change of address, that information typically stays as technical data that is only applicable for mailing information. However, within that data are signs of life-changing events; did the policyholder just move from a small apartment in the city to a house in the suburbs?’

Katzav said this type of information is key to ensuring that insurance providers are alerted to the changes their policyholders’ experience, from marriage to children to a change in careers.

Katzav was somewhat less open about exactly how insurance companies might use the data Atidot provides in shaping their decisions regarding pricing and products. Asked if Atidot’s data could potentially be used by insurers to discriminate against some individuals — a big concern in the life insurance industry these days — Katzav insisted it was not an issue for his company.

“Regulators decide what is and what is not allowed to be accessed when making these assessments, and we focus on taking all the available sources within that sphere and creating tools which allow actuaries and insurance providers to make their decisions,” Katzav said. “Atidot is not part of the policy issuing process.”

Atidot said it plans to use the new funds to scale up its business operations and expand its U.S. sales and customer support activities. The company also plans to expand its actuarial science, data science and software engineering teams.

Image: Atidot