e2Value Provides Data And Values For Structures In the USA And Canada

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Below is our recent interview with Todd Rissel, Chairman & CEO of e2Value:

Q: Could you provide our readers with a brief introduction to e2Value?

A: e2Value provides data and values for structures in the USA and Canada. We primarily help the insurance and banking markets. We started in 2000 with a patented tool that allows highly accurate delivery of values and data in nanoseconds. That data is used in financial planning and risk management. The wildfires in California and recent hurricanes show extreme cases where the aftermath is not just cleaning up the twisted relics of homes but having the financial resources necessary to start over.

The core of our model is a simple interface or an API to deliver all the needed information, which allows the best decisioning processes. Clients use our tools to analyze millions of properties each year. From the Arctic Circle to Key West, and from East to West coasts.

Our clients range from single homeowners, to agencies/brokers, to large, multi-national insurance companies and financial institutions.

Q: Can you give us insights into your solutions?

A: We were founded by two people with limited programming or IT experience. My partner, George Moore, and I had backgrounds in construction and then 20 years combined experience in a unique part of the insurance process. We had a very specific goal with our first plan but with George’s literature and programming background, and my lack of practical IT skills it led us down a very narrow alleyway. We planned for a nationwide tool that could be used for any value home in any zip/postal code. However, two people with limited resources could not follow a traditional path. As he had experience with early object-oriented programming, hypertext browsing, Excel® VBA and—he hates when I say it, but it is true—is a genius, and, as I like to take the most efficient/quickest path to a solution, it turns out computing power solved our issues.

Our non-traditional approach solved a traditional problem. We used the power of the Internet and algorithms to do what people used to do, or create an estimating AI (artificial intelligence). When we said “bot” 20 years ago, nobody knew what we were talking about. Now, you can’t say bot for other reasons, but people definitely know what they are now! Even though our technological approach was non-traditional, we applied our traditional insurance skills and that of an industry veteran, Sy Green, to apply technology to a core insurance need. We were not clever enough to coin the phrases “Insurtech” or “disruption” back then, but that’s exactly what we built. George has an English Literature background with an emphasis in the Renaissance and used a phrase the great artists used from then, Sprezzatura. It is an Italian word that roughly translates to mean making the difficult seem easy. The artist would conceal the effort or conscious thought that went into a project or piece, for example, and made what they did seem very easy or obfuscate messages in the artwork. Our goal was to make a very complicated process be and seem effortless to the end user. Although, we aren’t hiding anything! Well, just the detail and effort the technology does behind the scenes to make the process seem simple.

Q: What are the benefits of using your platform?

A: We specialize and focus on value. Our focus is to deliver a value within +/- 2.5% accuracy for any structure in the USA and Canada. To date, borne by 18 years of use and therefore 18 years of comparisons to reality, we have delivered that accuracy. The important part of a percentage of accuracy claim is, “Versus what?” A 2.5% variance can be a huge miss when flying from the Earth to Mars. In our case, current, competing error rates are more than 50%. The data after each catastrophe shows financial hardships as consumers and their risk managers used tools that failed to layout the true values and impacts people faced. Our core mission as to help anyone, expert or not, easily see what they should consider when laying out their financial plans and protections. If a family or business miss their protection estimate by 50%, currently $350,000 – $400,000 for homes in California, the tragedy of an event is compounded by the enduring effects of those financial shortfalls.

We don’t think the market, either buyer or seller, can tolerate such variances and the impact of those variances. We offer the market a choice where they don’t have to live with mediocre valuation tool performance. All players in the market benefit from more, open and better data. Homeowners need a robust insurance market. Properly understanding the risk allows adequate pricing, which allows a competitive market and competitive rates. We believe that we offer a way to accurately measure risk, which allows the proper pricing of risk.

Q: Why did you develop Pronto? How does it work?

A: Our initial design was to have a consumer, agent or underwriter type in an address and get back a value and details about a structure. We wanted very little input from the end-user except verification of the details. In 2000, publicly available data was non-existent for our world. Our first tool, Mainstreet®, was the basis for the next generation. It needed the user to enter data, but we used terms familiar to consumers/agents and terms used in the mortgage market. By 2008 publicly available data was robust enough so we could move from Mainstreet to Pronto. We built the business for Pronto, before we could even deliver Pronto. We knew the market was headed in that direction. We were not particularly omniscient, it’s just that consumers move to easier, not harder. All markets are driven by consumer demand and insurance is no different. Does anyone sell a product by saying, “Now, harder to use!”?

Pronto translates public property data and builder data in an easy-to-follow and understand format. Pronto starts with an address. We then reach out to various data suppliers, like tax databases, mortgage databases, etc., to complete the needed profile of a home. We need to know the size, shape, materials used and location. Once we have that data, we then connect to the e2Value valuation data and translate that data into an insurable value. When you get an auto policy you don’t say, 4-door, 5-seat car with a motor and transmission. It is a specific make, model, year with specific features. There are a number of auto value data sites/publishers. They all work on make, model and year. We brought a similar process to homes. Is it a 1910 American 4-Square? Or a 2002 California Ranch? 2018 Gulf-Coast Style cottage? The value of a one-story home is not all that precise; any more than putting a value on a 2-door car. Back to easy to use: everyone knows their address.

Q: Where do you get your data from? How accurate is it?

A: There are two basic suppliers of publicly available structure data. There are offshoots of those databases that other suppliers enhance to make it their own. Anyone can buy that data and use it for the permissible purposes. We also have our own, proprietary database about building costs across the USA and Canada. We are happy to show people how to build their own builder database. Both are accurate. 100% of all property taxes are collected on that data. At the very least, it is a minimum standard that has been used, updated and checked since the mid-70s. It may have some errors as to the type of siding or roof cover, but those errors are minimal and will have a minimal effect on any values – or should. A home does not cost $3,000,000 because of the siding. Conversely, a $300,000 home and a $3,000,000 can both have the exact same roof and wall cover. The builder data comes from builders and therefore has minimal to no errors.

The issue is rarely data. The issue is to know what data matters and what data is less important. At the center of both, however, is our patented process that filters the data to standardize and bring a consistent approach to each valuation. A builder’s data can be very accurate, but if applied to the wrong home or building, useless. The trick, and part of our patent, is to know what data applies in each situation.

To date, the process and the data have shown a +/-2.5% error rate. Based on a 6-nanosecond call for data and a value, I think it is very accurate.

Q: What are your plans for the future?

A: Even though I’ve been in insurance for many years, and e2Value for 18, I’m more excited today than 18 or 31 years ago. In many respects the carriers are just getting started with data, AI, Blockchain, IOT, etc. Our tool and the data handling process we offer works today but will work even better with newer technologies. We can’t imagine all the uses for our tools, but there are tons of smart people who can. As one example, we teamed up with Willis Towers Watson (WTW) to offer a Structure Insurance Score (SIS). SIS is like a make/model symbol used in auto rating, but for homes. The SIS measures damage-ability and repair-ability but for the basic home loss perils like fire, water, weather damages, and even theft. Today, two similarly valued homes will get a similar if not exact premium. However, they could—based on the homes’ characteristics—represent two different susceptibilities to fire or water damage as well as the cost to repair those damages. The SIS can show the impacts and allow carriers to price the homes to better represent their appropriate loss costs. About 3% – 5% of the homes represent an outsized influence on the loss ratio. On the other side, there are 10% – 15% of homes that are supporting that tail and could benefit from a premium reduction. SIS allows a carrier to “see” the homes that should be charged more and those that should be charged less.

We look forward to developing more products like SIS. Our core tools allow partners to do just that. Thank you for your time.