Scout InsurTech Interview with Veracity ID

VeracityID is a cloud-native risk detection and mitigation platform that helps insurers improve financial performance through continuous monitoring and active intervention into high-risk transactions across the policy lifecycle. While their primary focus to date has been Auto & Home, they are now exploring pilots within the Workers Compensation sector, where they believe the data models and underwriting solutions they've developed readily extend to that line of business. Co-Founder and CEO John Macauley sat down with Scout InsurTech’s Chris Luiz to discuss how VeracityID is redefining lifecycle risk management, why linking marketing, underwriting, and claims is essential for profitability, and how the company’s customer-funded growth model keeps it focused on measurable carrier results.

Who are your clients?

Our founding client was MetLife Auto & Home, now part of Farmers Insurance. Since then, we’ve partnered with carriers to improve their underwriting outcomes and extend leakage and fraud detection across the policy lifecycle. Our focus to date has been on personal auto and homeowners, with early Workers Compensation pilots now under discussion. We support underwriting, claims, and SIU teams seeking to reduce loss ratio and leakage through proactive risk management.

Who uses your product inside a carrier?

Our primary users are product managers, state and national underwriters, and underwriting leadership. In addition, claims, SIU, and billing teams can leverage the same platform to investigate anomalies, measure risk signals, and create alternative workflows as events are detected throughout the policy lifecycle.

What does your product do?

VeracityID detects risk signals by linking agent and customer behaviors, histories, and attributes with financial and operating outcomes captured through APIs during live transactions and periodic feeds from core systems.

We begin by organizing carrier and third-party data into a time-and event-based model, enabling us to identify anomalous activity within and between individual transactions—such as quotes, policy changes, claims, billing, and other lifecycle events—as well as across sequences of behaviors, suspicious relationships between entities, serial activity patterns, and high cost-to-serve indicators.

We then associate these anomalies with adverse or positive financial outcomes, helping carriers understand which behaviors drive profitability or loss. Underwriters can use these insights to design and deploy alternative risk-resolution workflows through a simple, AI-powered rule-creation service, without relying on IT or complex integrations. The result: carriers can act immediately, in-transaction, when a risk is detected at quote, endorsement, or claim.

Finally, VeracityID tracks and reports the frequency, effectiveness, and financial impact of these interventions, empowering underwriters, product managers, and claims teams to measure, refine, and continuously improve results. All of these services are GenAI-enabled, fully user-composable, and require little or no IT support, extending advanced analytical and operational capabilities to every line-of-business expert in the enterprise.

How much capital have you raised?

None. We are customer-funded—and proud of it.

Was the company born from within or outside the industry?

From within. I’ve spent more than three decades serving banking and insurance as a consultant, executive, and founder across health, property and casualty, and reinsurance. VeracityID’s team reflects that experience, combining deep domain expertise with advanced analytics and technology innovation. We also have a core team of senior advisors who have led underwriting, product management, and sales functions at top-15 carriers, bringing direct operational insight into the challenges we solve. Complementing them, our development and data engineering teams bring decades of experience in commercial software development, large-scale data integration, and applied analytics, ensuring the platform meets the reliability, scalability, and performance demands of enterprise insurers.

What growth metrics have you accomplished over the last 12 months?

We are engaged or in pilot discussions with multiple major carriers. The platform has matured significantly, our integrations remain light and API-based, and we are scaling while maintaining stable, long-term production deployments.

Within your domain, what is the current challenge that the industry is facing?

Most carriers still struggle to link their marketing, underwriting, and claims functions around a unified view of customer risk. Despite billions spent on core systems, the return on those investments remains limited because they rarely address the root issue: selecting and managing risk effectively throughout the lifecycle.

Carriers face two major internal challenges in making that transition. First, legacy silos in underwriting, claims, billing, and administration persist, reinforced by systems and communication structures that discourage collaboration and knowledge sharing. Second, most organizations still take a transactional view of policy management rather than a risk-centric view, treating each quote, endorsement, or claim as a discrete event instead of part of a continuous customer risk journey. It’s a Conway’s Law problem writ large; their systems mirror their structures, and both resist integration around the customer and the risk itself. 

As a result, too many carriers continue optimizing for operational efficiency rather than strategic risk performance. Yet the greatest lever on financial outcomes isn’t processing speed—it’s writing better business, detecting risk shifts sooner, and acting before small problems become large losses. 

The industry is now reaching what we call an “AI Moment”. Carriers must decide whether to use AI to automate what they already do, essentially becoming faster 'Risk Processors', or to reimagine themselves as continuous risk selection and management enterprises. The winners will pursue the latter path, and VeracityID offers a platform purpose-built to enable that transformation.

How does Veracity ID take a unique approach to providing value?

We continuously detect, score, and act on risk across the policy lifecycle – and drive action quickly and at scale. By combining behavioral, transactional, and financial indicators, VeracityID surfaces issues early and provides workflow tools that let underwriters and other teams resolve them in real-time. Our platform improves risk selection, retention quality, and combined ratio, while aligning acquisition and underwriting around profitable growth. We’re cloud-delivered, API-driven, and priced for enterprise scale, enabling carriers to run every transaction through the model and learn continuously.

What inspired you to start this company?

My co-founder developed advanced network-based detection systems for the U.S. government, while I brought decades of insurance experience. When a major carrier asked us to uncover hidden underwriting and direct-channel fraud, we saw a chance to apply those analytical techniques to insurance. The result was a real-time risk detection platform that helps insurers see what they’re missing and act before it costs them.

Can you share any goals for the next 12 months?

We’ve already built LLM-based tools that allow users to execute complex data queries and create risk selection rules quickly and efficiently, without technical assistance. Our focus this year is to help carriers move beyond today’s hunt-and-peck approach to risk management, where decisions often rely on incomplete data and underwriter intuition. With VeracityID, those limitations are replaced by a proactive, AI-powered risk detection and solution-proposal engine that continuously identifies emerging risks, recommends interventions, and measures financial impact. Strategically, our goal is to help forward-thinking carriers materially improve risk selection, underwriting consistency, and profitability—delivering sustained advantage in any market cycle.

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