The following interview is a conversation we had with Martha Dreiling, Co-Founder & COO of Reserv, on our podcast Category Visionaries. You can view the full episode here: $28 Million Raised to Build the Future of AI-Powered Insurance Claims
Brett
Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the front lines building it. In each episode, we’ll speak with a visionary Founder who’s building a new category or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right into today’s episode. Hey everyone, and welcome back to Category Visionaries. Today we’re speaking with Martha Dreiling, Co-Founder and COO of Reserve, an insurance technology company that’s raised 28 million in funding. Martha, how are you?
Martha Dreiling
I am great. Thank you for having me, Brett.
Brett
No problem. I’m super excited for this conversation and let’s jump right in. So talk to us about what you’re building today at reserve.
Martha Dreiling
Reserve is the world’s first AI powered insurtech company focused on processing insurance claims on behalf of large self insureds and MGA’s and carriers.
Brett
I’m sure the audience is just jumping out of their seats saying that’s the sexiest thing I’ve ever heard. It gets back to the founding of the story. What was going on in your world that you and your co-founders observed that this was a problem that needed technology to solve it?
Martha Dreiling
Yeah, when people think of sexy companies, they don’t often think of insurance claims in the PNC space, but it’s actually a really fascinating part of the insurance ecosystem. But our founding story was a little bit different than most. So we’re a venture incubation. We were the first incubation that being capital ventures and all tie ventures had partnered on. And the origin story of reserve is a lot of serious industry insiders being dissatisfied with the kind of CPA or third party administrator options in the market. There are a lot of legacy players with legacy technology and they weren’t really well equipped to meet the needs of modern MGA’s and reserve was kind of born of the idea that it was time for a new entrance with more modern technology enter the space to service the ecosystem.
Martha Dreiling
So we had a lot of industry insiders coming together in the beginning of reserves. Myself and CJ Prisville, my Co-Founder, have spent a few years in various insure tech companies. So we had a pretty good understanding of what was working in the claims space and what wasn’t working in the claims space. Thats how we came together in May.
Brett
Of 2022 and has the problem that you set out to solve. Have you seen that evolve over time or what you’re solving for today, exactly what you’d set out to solve on day one?
Martha Dreiling
Its pretty close to what we set out to solve on day one. But the intensity of what were trying to do, I think, has taken on greater meaning as we’ve gotten started. I think over the last ten years, climate change and just the tightening insurance market has really drawn a fine point around the importance of the claims experience. Everybody at some point in their lifetime has some kind of insurance claim, whether it’s a car accident, whether a tree fell on your house, or God forbid, something more serious happened like a hurricane or a tornado. That claim event is one of the worst moments in anybody’s life. And you want your kind of claim servicing partner on the other side to be not only empathetic, but you want them to have good technology, you want it to be a really seamless process.
Martha Dreiling
And for the insurance companies and MGA’s that we work on behalf of, one of the most important things for them is to understand why did this claim happen and what insights can I draw for how I should be pricing my product and seeing the market in the future? And many of the legacy incumbents are just not well set up to provide that level of information or that level of kind of tech enabled service back to customers. So a reserve, we’re trying to kind of rethink the model from a real.
Brett
Grounds up perspective when it comes to the market category. What is that market category? Is it claims processing? Is it claims intelligence? I think I saw someone using that the other day. What’s the market category?
Martha Dreiling
We would call ourselves a TPA, which is an acronym for a third party administrator. But I think our version of a TPA is, yes, the typical TPA service offering of just an adjuster who can process the claim is kind of our bread and butter. But what you get from partnering with somebody like reserve is a lot more intelligence and data about what is happening in the claim. So if you’re an insurance carrier, knowing that claim a was water damage and it was $10,000 is not particularly helpful for you as you think about fine tuning your underwriting models. What you need and want to understand is it was water damage because a lead pipe burst on an exterior wall. It flooded somebody’s basement, they were 5 miles from the coast, and it was a hundred year cold snap.
Martha Dreiling
Only the kind of entity that would be handling that claim would have that level of information or at that kind of granularity, and that entity needs to be set up kind of from day one to capture that data, make it available for machine learning or AI processing. And that until kind of reserve wasn’t really an option in the market.
Brett
So it’s timely because unfortunately, we’re, what, a few days out from hurricane. Was this Milton? I think this was Milton, right?
Martha Dreiling
Hurricane Milton, yeah.
Brett
What’s happening behind the scenes? So right now, I’m sure there’s a lot of claims that are being filed. Like, take us back, tell us, like, what happens there for those of us not in the insurance industry, like, where do people go from here?
Martha Dreiling
Yeah. So in the insurance industry, these are called cat events, a catastrophic event. And so the expectation from Hurricane Milton is it is going to cause at least 800,000 insurance claims. It could be, you know, over a million. We’re still in the early days. It’s kind of hard to tell. But any insurance company opening claim files for that magnitude and volume of claims, it’s a large undertaking. You need to have really good, what’s called first notice of loss intake pipes. You need to have the staff standing by to be kind of the empathetic ear to answer the questions. The people around. What kind of coverage do I have? Did I have flood coverage? Did I have wind coverage?
Martha Dreiling
And so in these moments, it’s kind of an all hands on deck event for the entire industry because the whole of insurance is peaking in kind of a large quantity of claims right now. And we’ll be servicing these claims for the next two to five years, because sometimes there’s a long tail to this kind of claim.
Brett
What’s the most surprising thing about the insurance industry that would perhaps surprise those of us who are not in the space?
Martha Dreiling
I think insurance people are a lot more empathetic than the industry gets credit for. I think we all know that at the end of the day, what we’re offering people is protection and safety. But the way a lot of consumers interact with their insurance company, it’s a very transactional thing. I need to purchase a policy I wanted at x amount of pricing. And there’s this kind of belief that maybe the insurance carrier isn’t looking out for their best interest. And I think if you kind of enter the insurance space, and I wouldn’t consider myself an insurance native. I started my career in financial services.
Martha Dreiling
What I found is actually a group of people who are really empathetic, who think about what’s the right coverage, what’s the right way to categorize and classify this risk, to give the best and profitable kind of outcome to consumers. Because at the end of the day, nobody wants an insolvent insurance company that is not good for anybody. So I think that’s probably the most surprising thing. And then the other thing I would say is, when I entered the insurance space from financial services, I really didn’t have an appreciation for how complicated the technology stack is. Behind all of these companies, we navigate 50 states worth of regulations, a very detailed level. Like in California, if you’re in a car crash, you need to ask, was a car seat in the vehicle?
Martha Dreiling
Configuring a system and platform that can handle 50 states worth of regulations is no small feat. It’s actually a very complicated technology undertaking. And I think without being in the industry, a lot of people probably don’t realize the level of complexity that lives behind the scenes in the insurance industry.
Brett
Yeah, I can’t even imagine just the regulatory headaches that you have to deal with or navigate.
Martha Dreiling
These rules are in place for a very good reason, but there are a lot of them that you need to make sure your team and your company are aware of at all times.
Brett
So when you have one of these, what do you call it? A cat event, has it ever happened that has wiped out an insurance company? Just out of curiosity, have insurance companies ever just been wiped out by one single cat event?
Martha Dreiling
Yes, absolutely. That’s why the regulations around insurance companies and the level of profitability they need to show the solvency requirements exist. There’s also a concept insurance called reinsurance where you can spread the risk around to multiple entities. And these kind of rules or standards serve a really important part of the market because it keeps entities from becoming insolvent.
Brett
Is that what everyone does in Bermuda? I think I read an article about that. Reinsurance in Bermuda?
Martha Dreiling
Yeah. Bermuda is known as a great place for reinsurance companies. Risk sharing is common, it’s needed, and it can be complicated at times.
Brett
We go back a little bit to the founding story or the early days of the company. So from the moment you had the idea until you started generating revenue, how much time had passed.
Martha Dreiling
It’s surprisingly short. So we got started in May of 2022, and we processed our first claim October 1, 2022. And for what we do that is just record lightning speed. It usually takes taps months, years to be able to launch new capability, but we’re very fortunate that we got our start at the same time chat GPT was released. So were able to contemplate from the very beginning what would an AI powered TPA look like. And we also were the beneficiaries, I think, of being able to leverage all of the new SaaS platforms that exist that weren’t necessarily here ten years ago. And so from leveraging rippling’s hidden system to notion for customer documentation, to a really interesting kind of claims loss fund management software like Vitess, were able to build a really great company in a very short time period.
Martha Dreiling
So within five months were processing our first claim. And today I think 29, 30 months later, we’re a company of 260 people working on behalf of eleven different self insurance and insurance carriers, working on 50 different programs. And for what we do and in our industry, this is just exceptional growth at a really fast pace.
Brett
I feel weird saying that 28 million is a modest amount of money, but in the context of venture backed startups, it is somewhat modest for that team size that you have. So that’s amazing. You must be growing very fast then.
Martha Dreiling
Yeah, I think one of the things we realized pretty early on was there was clear product market fit for what we are doing. The industry really is hungry for a new tech enabled version of ATPA and kind of our earliest form factor. We were getting to have conversations with companies where it would have been unusual for a twelve person company to get to have conversations with organizations like that. But it really speaks to, I think, the industry need and desire to have a more tech enabled version of somebody processing their claims. Especially in a moment where there’s a phrase insurance, hard market, soft insurance market, it’s where rates are tightening and et cetera. We’re in what people would call a hard market now, which means being able to have precision in your underwriting is exceptionally important.
Martha Dreiling
And the value of claims data has never been more important. And what reserve can offer our customers, MGA’s or insurance carriers, is just a deeper level understanding of what is causing the events in their portfolio. And that has been a very attractive value proposition to people.
Brett
What do you think you got right to nail product market fit like that? A lot of founders that I bring on, it’s not easy, it takes sometimes years to find product market fit. Did it help that it was such an established category and you were just reimagining the category, so there was no kind of market risk or product risk. You knew there was going to be demand and you just had to do it better than the existing market? Or what do you think the answer is there?
Martha Dreiling
I think that’s definitely a factor. The concept, we did not need to convince anybody to outsource claims processing. That is kind of a time tested concept. There are a lot of really large incumbents in the space, so that definitely worked to our advantage. The other thing that’s kind of happening in the insurance market is in the last ten years, there has been a bit of kind of revolution in the MGA space where smaller entities or specialized underwriters can set up their own company and partner with kind of risk capital providers to go to market. And it is very common for MGA’s to leverage the services of a TPA. And we get to be the beneficiaries of helping these MGA underwrite better, faster, smarter.
Brett
What I see across every industry is there’s a lot of buzz around AI, as I’m sure you can imagine everyone saying they’re doing AI. I’ve had a lot of founders that come on and their domain is.com dot, but they want me to introduce that as AI. How are you standing out in this world where everyone says, we have AI, our AI is better, faster? Everyone seems to be saying the same thing with AI. How do you make sure that everyone knows that you’re different, your AI is better. How do you stand out there in such a noisy world?
Martha Dreiling
Really good question. I think in our space, you just can’t slap a large language model on top of what you do and expect, necessarily a good or differentiated outcome has to be exceptionally thoughtful. We process very sensitive information. You know, we have information about claimants who have, you know, they’re in a car accident and maybe they have a broken pelvis, or maybe it was even a fatality event. So our application of AI has to consider, what kind of Pii are we sending to these large language models? How do we strip it out? How do we tokenize it? Also, what is the right large language model for this very particular problem? And what I think is very fascinating and what we’re trying to do at reserve is our goal is not to automate away a claims adjuster, it’s to empower a claims adjuster.
Martha Dreiling
So it’s a very elegant dance between where you insert people, where you insert process. Where do you insert technology? And that’s kinda kind of the magic of what we’re trying to build. So when we think about deploying AI, there’s a couple of use cases where it makes a ton of sense. The first is how do you kind of add AI to the first notice of loss? So you’re in a car accident on the side of the road. You just want to quickly let your insurance company know you can work with an AI agent to kind of give them the immediate facts, the location, who those parties are.
Martha Dreiling
It’s a very kind of logical application, using AI to help an adjuster know where the kind of high probability of high severity claims, so you can match the right level of adjuster with the right kind of specialty to that claim. That’s an excellent use of AI, I think, to get to your kind of other part of your question about how do we do this with a lot of thought. I think one of the advantages of reserve is we take a lot of care to curate the totality of the claim file, which means all communications, your emails, your notes, your documents, your phone calls, those live in a unified data model that are kind of attached to a particular claim event. So when we apply AI to it’s not just kind of horizontally wide data set, it’s also a rather deep data set.
Martha Dreiling
And so you get a lot more insights out of the claims than if you were to pass it, say, a two sentence facts of loss, which would be a very common application insurance.
Brett
To book a free consultation, visit Globaltalent Co. I want to dig a bit deeper into something else you mentioned there, because I’ve seen it in a lot of other industries. Companies come out swinging and they say our technology eliminates this role completely. It disrupts the whole industry and changes things. And it seems like that path rarely works because that’s a very hostile direction to take. I could see how it sounds like a sexy story of disruption and change, but I’ve seen it much more of a successful path when they do what you’re talking about of no, we’re here to empower you. It sounds like the claims adjusters, that’s who you’re trying to empower instead of eliminate them or remove them from the process.
Brett
Was that a big decision that you had to, like, debate in terms of how you were going to position it and message it? Or is that just the obvious path from day one that it was all about empowering these folks?
Martha Dreiling
I think for us it was pretty obvious from day one that this was going to be a company about efficiency and empowerment, rather than trying to automate away the role of an adjuster. To be able to kind of process claims and do it, I think, with a lot of nuance and intelligence, you need to respect that. Claims adjusters are actually wildly good at their job. They’re very empathetic to people on the phone. They know how to have a negotiation with someone. They know how to have kind of complex conversations about coverage because insurance policies are essentially a contract. But what’s challenging about the role of an adjuster today is they’re also bogged down with a lot of data entry, a lot of administrative tasks, and that is something that technology can solve exceptionally well.
Martha Dreiling
And so one of our core values at reserve is to automate the mundane so we can humanize the complex. Because by definition, if you are talking to us, you’ve probably had a really bad day. And what you want is empathetic ear to tell you know, what’s next? What should I expect now that I’ve been in this car accident or now that my basement has flooded? And that’s the kind of service that we think we can offer if we remain kind of focused on technology that enables adjusters.
Brett
Yeah, I can imagine no one’s calling in just to check in and see how your day is going.
Martha Dreiling
No, no. People don’t usually have their insurance companies on their Christmas card lists. Its a very in case I need it products. And when you need it, you really need it.
Brett
Yep, it makes sense. What about the marketing strategy? So maybe if you can paint a picture for us of how the marketing strategy began and then how its evolved or any of those big evolutions that have taken place over the last few years.
Martha Dreiling
I think one of the things that resonated with us kind of early on is that we know theres a lot of really valuable insights in these claim files and we want to make sure that it’s in the hands of the underwriters. And so I think this is kind of a different take than a lot of tapas is. We want to be the TPA built for the underwriter, in addition to the TPA built for the claims professional. And so when we think about kind of tooling and features that we’re building that are to our MGA and carrier customers. We want to also think about what would an underwriter mean to understand the risk of their portfolio.
Martha Dreiling
So an example is if you’re working on a transportation book of business, they might actually want to know how many accidents happen from a right turn versus a left turn. And can we curate a data set? Where they could answer that question is something that we think is pretty important.
Brett
What else, from a marketing perspective would you say you’re doing today that’s working well? And then is there anything you were doing from a marketing perspective that you’re previously doing that you said, no more waste of money?
Martha Dreiling
You know, I would think we’re still pretty early in our go to market efforts where a series a company, we’ve gotten very large, I think, in a short period of time, and that’s all about product market fit. But we just hired our first kind of formal bd person who joined us about two months ago and we’ve been in a very Founder led sales motion. So I think we’re just at the beginning of understanding this journey. What we do know is the constituencies that we need to speak to, that we need to resonate with. I doubt you’ll ever see billboards with reserves name on it because that is not how one markets a TPA. But insurance is a very relationship driven business. It’s also one where people understand your results and you have to take great care of your customers because it’s so relationship driven.
Martha Dreiling
So I wish I had a better question. Happy back in a year and I’m sure we’ll have a lot crisp answer about what really works on the marketing side, but we’re still pretty early for that.
Brett
We’ve been doing that with a lot of guests, bringing them back on. I think it’s two years, but it’s been super fun to have those conversations again. So we’ll definitely do that. Given what you just said, maybe this is not even a relevant question, but if you reflect on the journey so far, what’s been the most important go to market decision that you’ve made?
Martha Dreiling
Oh, that’s a really great question. It was a technology decision that has enabled some go to market movements. For us, it is pretty common in our space for taps to start when they servicing only one line of business. So they’ll start with workers comp claims or they’ll start with property claims and they’ll get a real size in that line of business and then they’ll add the second or third line of business. We actually took a pretty different approach. We service today really, the whole spectrum of PNC claims complexity.
Martha Dreiling
And what I think that has forced us to reconcile very early on is how can we build a technology stack that is flexible and adapts to the line of business so we don’t find ourselves kind of five years from now in a platform that is really just built for one line of business and we’re trying to shoehorn things in. And that early decision has given us a lot of flexibility now as we really kind of rev up our go to market efforts around the people that we can talk to and the lines of business that we can service, because we contemplated this pretty early on in our technology build out.
Brett
As you gear up for this big go to market push, what’s top of mind, or what’s keeping you up at night, or what are you thinking about heavily right now of like problems you’re going to have to solve or challenges you’re going to face? Anything like that come to mind?
Martha Dreiling
Yeah, we operate in a very complex environment. Actually, answering for me, answering who my customer is a really complicated question, because we care very deeply about policyholders and claimants that we service. We make important decisions on their behalf. We also work with MGA’s, but we sign contracts with insurance carriers. And so when we think about what we need to build or who we need to service all of those constituencies and we need to service them all well, or we won’t be successful. And so positively impacting everyone was one of our kind of core company values, and it was really important one just because of the kind of complex web of relationships that we need to maintain. So on the technology side, we need to build claimant portals, we need to build capacity and MGA environments.
Martha Dreiling
We need to connect with kind of the full ecosystem of vendors that you would want a claims provider to work with. If you’re in a car accident, you need a rental car, you want your kind of claims company to have a good technology integration with enterprise hurts or budget. And so that’s kind of things that we spend time thinking about.
Brett
Final question for you. Let’s zoom out three to five years into the future, what’s the big picture of vision look like here?
Martha Dreiling
Yeah, my hope is three to five years from now that the idea of going to your claims files to get the very best data about what’s driving risk in your portfolio is obvious. And you need to work with a kind of TPA that enables it. And I think we’re on the cusp of a real change in the insurance industry in this kind of hardening market. Where people recognize that you can’t overlook the value of the data that you have in the insurance claims data set in your, what their board row files are, what it’s called, and that you want a provider who can kind of meet you where you are on the technology side.
Martha Dreiling
And I think three to five years from now, it is going to feel wildly obvious that you should be working with an AI powered claims TPA, and it should be kind of the default rather than maybe something that’s considered new or novel now.
Brett
Amazing. I love the vision. I really love this conversation. We’ll definitely have to bring you back on in two years to talk about all of the progress and all of the success that you’ve had. We’re going to wrap here before we do for any founders listening and want to follow along with you. Where should we send them? Where should they go?
Martha Dreiling
Ww dot reserve.com. And that’s reserved with no eternity. Cute name.
Brett
Well, thank you so much. Really appreciate it.
Martha Dreiling
All right, thanks.
Brett
This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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