CAPE Analytics Begins a New Chapter

Today, I’m pleased to share that CAPE has entered into an agreement to be acquired by Moody’s. This is an exciting milestone after a decade of company-building. Since founding CAPE Analytics 10 years ago, we have developed a leading artificial intelligence platform that delivers proprietary, instant, and accurate risk insights for property at the individual address level—at a global scale. Today, nearly half of the top 50 U.S. property insurers, as well as some of the world’s leading banks, look to CAPE to help them align their pricing and underwriting of properties with their business strategy.

Along the way, I’ve felt fortunate to lead a fantastic team through a grand adventure filled with rich, unique experiences, including both Type 1 and Type 2 fun. Type 1 fun – enjoyable in the moment – included seeing our product become the market leader, setting sales records, successful capital raises, and working with many wonderful colleagues – in some cases celebrating weddings and the arrival of newborn children. Type 2 fun – difficult in the moment but rewarding in retrospect – included surviving a global pandemic, navigating the rapid interest rate increases of 2022 and 2023, and managing our transition to cashflow positive & profitable growth.

Today, CAPE has established a strong business with a set of unique capabilities that offer our clients important advantages:

• We have built what we believe is the strongest AI team in the business, including many team members with PhDs or advanced degrees in math, physics, or related hard sciences.
• We have developed proprietary models which, in carrier test after carrier test, are shown to be the most predictive of risk, and have been developed and trained on a broad set of input data.
• We have been entrusted with a large body of proprietary loss information shared by many of our clients, which aid in our testing & development, ensuring that our models remain the most predictive of loss.
• We’ve built a broad, deep, and long-tenured intellectual property portfolio.
• Finally, we have a practice of proactive regulatory engagement resulting in a deep track record of approvals from State Departments of Insurance supporting our offerings.

The net effect of this is something we think of as a flywheel of sorts: having established a broad and deep set of client relationships, we benefit from rich client feedback; while our leading AI platform and internal tools, in turn, enable us to iterate our product offerings with both speed and a high degree of impact.

Now, CAPE is beginning a new chapter as part of Moody’s, and I could not be more excited about the potential this holds. Moody’s is a unique partner for CAPE in several regards:

• First, Moody’s – with its leading catastrophe modeling platform – offers a unique complement to CAPE’s address-level vulnerability and enables a much more complete view of risk.
• Second, Moody’s global scale could accelerate our expansion into international markets.
• Additionally, Moody’s access to broader, more diverse information gives us the ability to further broaden and deepen CAPE solutions with the inclusion of additional, orthogonal, risk-relevant input data.
• Finally, Moody’s footprint with financial stakeholders beyond insurance carriers may accelerate the adoption of CAPE’s offerings within the mortgage ecosystem and those of other financial stakeholders.

Most importantly, this combination will bring significant benefits to our clients. Moody’s continued commitment to building a leading property insurance analytics platform will drive new, creative solutions for carriers.

Moody’s is continuing to deliver on a strategy to build a leading, at-scale suite of offerings founded in innovation, as demonstrated by their acquisition and subsequent investment in RMS, more recently with Praedicat, and now with CAPE. CAPE broadens the aperture beyond risk and modeling into everyday underwriting, quoting, and eligibility workflows. The resources to continue to deepen innovation in a robust way in this part of the value chain will benefit carriers with a broader array of rapidly developing solutions. Moody’s has become a leader on the risk side of insurance and can, in combination with CAPE, bring a much deeper set of solutions to carriers’ underwriting workflows.

Finally, I’m encouraged by the strong cultural fit based on shared values, which include a long-term, customer-focused view, a focus on growth & innovation, and talented, self-motivated, humble, and collaborative colleagues.

I believe the next decade has the potential to have an even higher impact than the one we’ve just completed.

 
To learn more about this news, visit https://moodys.com/web/en/us/who-we-serve/insurance.html#cape