For Itai Ben-Zaken (pictured above), Honeycomb’s founder and CEO, there’s no such thing as a perfect product.
Honeycomb is a digital MGA start-up focused on insuring multifamily properties, and it recently raised a $15.4 million Series A funding round. Part of that money is slated to propel geographic expansion and operational scaling, but Ben-Zaken also envisions enhancing the company’s signature platform in multiple ways. That process, he explained, should be never-ending by design.
“I think a product that’s perfect is maybe not very interesting to build,” Ben-Zaken said.
Honeycomb initially debuted in 2019 as a digital agency, selling existing policies in the market from incumbent insurers. After hearing from customers and brokers about what they wanted to see in the market, the company morphed itself into an MGA and developed its platform, which encompasses a policy management system and modeling that helps price the risk.
The Honeycomb platform relies on proprietary user-generated data, advanced artificial intelligence (AI), and computer vision that helps it automate the underwriting process. Honeycomb claims that its concept helps improve the customer experience and tailor coverage, in part, with improved profit margins via its real-time rate/quote/bind offering. Ben-Zaken said that many improvements and enhancements to the platform are planned beyond this.
“We built a pretty unique, logical stack that allows us to do what we do in real time and price risk really, really deeply already,” Ben-Zaken said. “But there’s a lot more that [we] want to be developing and enhancing in our platform to leverage more signals to collect more data and improve the modeling of the images we collect and the price modeling.”
Also planned: creating additional functionality elements that are not currently on the platform for customers.
To be sure, the Honeycomb platform relies in part on AI and machine learning, which improves as the company collects more data and more risk models. More models are also coming to help further this process.
“We have about five models that are working in production, models like the roof model, or a model that looks at the externality of the building,” Ben-Zaken said. “We want to start developing more models that look at more components of the building that give us the ability to price the risk more precisely and accept more risks.”
On the functionality side, Honeycomb plans to expand its customer alert system.
“Right now, customers are getting alerts for certain elements that happen, and we want to do more alerts,” Ben-Zaken said. One goal involves having a system where when customers get alerts and they’re asked to complete a specific action regarding their coverage, that get a price reduction on renewal.
Other tweaks and improvements will work internally, addressing how the company manages its loss ratio, margins, and what it learns from customers to enhance their experience, he added.
As Ben-Zaken explains, most insurtechs and start-ups continually tweak and improve their platforms and technology.
“That’s part of what sets start-ups apart. The learning curve is a lot quicker to increase … as you learn there’s more things that you want to put into the platform,” he said. “The customers are always changing. They’re getting younger overall, or older overall, and they get more tech savvy or less tech savvy.”
Ben-Zaken added: “when we think about start-ups … [and] some of our peer companies, too, the big thing that they’ve done is really move quickly, sometimes break things, but then learn from that and continue to innovate.”
Hiring and scale
Honeycomb is a mostly remote company, with a team in Israel that primarily handles engineering. Its US headquarters is in Denver, Co., though employees are also based in Illinois and California. There’s also a small team in Poland that handles quality assurance and support work.
About 26 people currently work for Honeycomb, though the company has plans to hire another 30 through 2022, fueled by its new venture capital financing. Ben-Zaken said that new staff will fill positions in engineering and product development as well as marketing and customer support as Honeycomb scales up its operations. Currently, it operates in Illinois, Arizona, Michigan and Ohio, with expansion expected into another 10 states by the end of 2022. At that point, Ben-Zaken said, the company should cover 60% of the US market.
After growing this past year, Honeycomb expects to insure $1 billion in assets by the end of the 2022 first quarter, he said.
