The InsureTechGeek 9: Water, Sensors, & AI with Yaron Dycian from WINT-Water Intelligence
The InsureTech Geek Podcast powered by JBKnowledge is all about technology that is transforming and disrupting the insurance world. We will be interviewing guests and doing deep dives with our own research and development team in technology that we see changing the industry. We are taking you on a journey through insurance tech, so enjoy the ride and geek out!
JAMES: Alright, alright, alright. What a great day to talk about insurance technology and geek out. I am your host, James Benham, the InsureTech geek. And geeking out for another week. And this week on a topic that I did not expect to be so interesting. You know I heard statistics that electricity, 30% of electrical usage in buildings, was from the passive load. Things that are plugged in that are not turned on. That I had no idea how much water is wasted in buildings and of course, causes billions and billions and billions of dollars of damage, and just the per claim damage cost of water is just amazing. And the technology that is being used is staggering so this week we have got a phenomenal interview talking all about water, artificial intelligence, the use of software and hardware sensors, and the use of machine learning to look at flow, water flow and tell a building owner if they have got an issue, and how all of that ties back into insurance and loss reduction and it is just an exciting topic. So, I am excited about this week’s podcast and I hope you enjoy it as much as I did. And I am here today with Yaron Dycian and Chief product and strategy officer of WINT-Water Intelligence, joining us from Tel Aviv Israel. Yaron, thank you so much I know it is a little bit late there In Tel Aviv. I appreciate you joining us today.
YARON: Hey, thanks for having me. Appreciate it.
JAMES: On the InsureTech geek we love talking about technology for the insurance business. We love geeking out on all kinds of hardware and software. I am a lifelong software developer. A lot of our listeners or lifelong technologists and we geek out on this. But before we jump into geeking out on the water, and the massive multibillion–dollar impact a little old trickle of water can have, let us talk about you for a second period because you have an interesting background. You were born and raised in Israel, you did 3 degrees over there, you served in the Israeli Air Force, which, I just want to pause for a second and talk about the Israeli Air Force because the amount of technology I’ve seen commercialized out of the Israeli Air Force, has been staggering. And the amount of holographic displays they have been working with augmented reality and, it is just, every time I see something commercialized out of the Israeli Air Force, I am like wow! These guys are advanced. And it looked like you got a chance when you were in the Air Force there to work with some pretty neat technology.
YARON: That is correct. It is not Israeli Air Force alone, Israel, in general, has become a hub for technology. You will find technology coming from Israel into every aspect of your life, from the discount key, which was invented here, ethernet switches, and many other things. So, yeah, it is exciting, it is an exciting time to be doing technology and especially a startup technology out of here.
YARON: Every VC in the world is putting their hands into Israel and most large companies, including, by the way, big insurers. If you look at Swiss Re or Munich Re or many of the other very large insurers in the world, they have a presence here to identify startup companies to build technology that could help them improve the business in various ways.
JAMES: Yeah. What was your favorite technology to work with when you were in the Air Force?
YARON: Oh wow. I loved electro–optics. You know obviously, I cannot say oh whole lot, but electro–optics is a passion of mine. That is what I did my masters in light is kind of a wonderful thing. It is interesting scientifically and it can do so many interesting things.
JAMES: And so many things we still have not tapped into, right? I mean we still have not figured out the power of the photon and of light. I feel like this just this massive untapped well of discovery that we just have not found yet when it comes to light field technology.
YARON: Oh, no doubt. I do not know if, but the inventor of the laser said that here is a cool lot of invention that it never has a real impact on the world. And we cannot live without lasers today, right?
JAMES: I mean, they are critical. I remember when laser point to point band worth came out. It was like; wow that is just amazing. When fiber optic connectivity come out, just projecting light through a strand of glass, light fields are really–really– interesting and light in general. So, it is cool that you got to go into at such an early age and it had an impact on your education and your career since then. So, you have had a pretty neat career where you have gone between Israel and Silicon Valley, you have worked all over the business from Mercado. I remember Mercado software. I started writing software in 1991 and I got involved in tech in the mid-90s. I remember Mercado, you worked there for a while and then went to Wavion and you ended up in the security business at RSA back in Israel. Tell me what that was like? You did it for about five years in the security business.
YARON: It was ten years. It was five years in a startup called Cyota acquired by RSA, and then another five years in a startup called Trusteer acquired by IBM. So, the second one was acquired by IBM. And it was an interesting time he did cyberwarfare during these times when people did not know the terms, you know today everybody knows how to talk about it and understands it, but at this time we were in both companies. I was helping protect banks from cyber-attacks, intended to steal money from their customer‘s bank accounts. We could talk for hours about that in a different podcast.
JAMES: It does not get much more important than that, does it?
YARON: Well hey, water is more important than that.
JAMES: There you go.
YARON: It is the cost of doing business, if we do not have water, we are all going to die. So, I think water is more important.
JAMES: There you go. There you go. Well, that is a bigger perspective. You know data security, of course, is becoming a huge topic. Back in 2000 and 2001 I was paid the right security papers on vulnerabilities and exploits back when I was an intern and then when I went full time, it was also paid to break into systems and then to fix them, right? So, it was just basic penetration testing. And my favorite system to break into was always the HR system. Because it had all the juicy bits. And I would try and go change the title of the HR director do something absurd, just to prove how insecure their system was. So, security weighs in our minds and there are huge but potential losses. It is a hot topic with insurers, for sure as well and their cyber lines that have not what we are here to talk about today. We are actually here to talk about water because it is also a major source of losses for insurance companies. What led you from security into water?
YARON: So, in general along with my career, I always chose areas that included, I think, three important aspects important to me. One was interesting technology, cutting edge technology that other people did not have, a big business opportunity, and the opportunity to do something good. And with these things combined, I went there. So, it is a new challenge, a new something interesting to do. So, going into water, I saw this opportunity or these three attributes of the business, so, water is a real problem today in the world in the sense that the world is running out of it. If you look at the New York times, like last week, they are talking about a huge shortage throughout India. There are articles and research pieces about the lack of water in London of all places. And in many other places. So, it is a global issue, partly driven by climate change and partly by human factors.
So that is one problem. Insurance companies are suffering massive damages from water leaks in buildings, so I have spoken practically to every large insurance company in the world. Tens of them. They have seen claims from $110,000,000 for a single water leak in a building down to if you talk about at $20,000,000 leak, your typical insurance company has seen multiple of those. And the problem is, well not the problem, but the reason it is not so visible is water leak is kind of a quiet thing. If something breaks inside the building, and water starts gushing through the building and it causes massive damage. Unlike a fire that nobody sees. So, you know those are the big challenges related to water. I also saw technology that is very unique in its ability to solve the problem, and practically every building in the world has this challenge. Every building in the world has water flowing in it and pipes that are not that reliable and are at the risk of damage. So, it is a huge business opportunity so all three factors that I care about merged here and I joined.
JAMES: That’s amazing and you’ve, the numbers you just presented are staggering and I will admit. Water damage, because we do a lot of insurance technology development work over in the work comp space, we also do property and casualty and you’re about wind damage, you know water, fire and you often hear statistics about more damage in a fire being caused by the water that is used to put the fire out, then the fire in some cases. I mean, water is in an incredibly destructive force. But you do not add up those numbers a $100 000 000,00 dollar claim. A single claim from a single leak That just seems almost incomprehensible, but the reality is, it is true. Because of the amount of damage, it wreaks in electronics, on HVAC systems on walls and it is amazing how much damage there is. And it is interesting too that you have stitched together two important causes. First, the bottom line for insurers and property owners right, because even though you have insurance on something when you have major water event, you have a lot of damage, it’s going to have a material impact that even your insurance doesn’t cover, right? The disruption factor of a water event is just staggering, right?
YARON: That’s exactly right. There is a disruption to the business, there is reputational damage, there is productivity damage. All these things are never covered by insurance. Moreover, even if they were all covered by insurance, you still do not want the headache. You do not want your building to be inoperable for two weeks now, and to have to restore everything regardless of cost. So yeah, it is a big, big potential for risk campaign.
JAMES: Yeah, and it is not all the time in business where you can solve a big problem for people’s bottom line, both owners and the insured and the insurer, and also solves a major societal problem right? I mean like, think about how many times in business when you solving a big problem for society and solving a big problem for businesses and owners?
JAMES: But this is the case here. It is almost like electricity. I was at a construction conference where they said that 30% of a building‘s electrical load is passive load. Meaning stuff that’s plugged in and turned off and when you think about the drain on society that is that a 1/3 of our consumption potentially, could be cut by changing the type of plug to a smart plug that shuts off when it as a passive device that’s not trying to pull power plugged into it? I mean that is amazing, right? I mean these are huge numbers and when you look at not just the financial cost of water leaks, but the societal cost of leaking fresh water. And I think of that every time I go into one of those, bathrooms where they have a toilet so urinals that do not flush, right? I am going, why does anybody because they work great, right? I am sure you have seen these. They work wonderfully and they save enormous amounts of water. Then you ask yourself why doesn’t everybody use these?
YARON: Exactly. And you know your example of electricity is almost identical to the issue of water waste. Practically every building you look at is wasting approximately 25% of its consumption to stupid little things, or big, or stupid big things, and causes of waste. So, I will give you an example. We all go occasionally into a restroom and look at the toilet bowl, and it is kind of a little wet. That little wetness that we see, is the seal that probably costs $0.50, not sealing well. Except that for those $0.50, if you think of a building where one toilet bowl at every point in time is leaking, which is much smaller than the average, then that cost the building owner $10,000 in water per year.
YARON: The multipliers, depending on the cost of water, that is about what it costs them. Some situations that we have seen, where water consuming equipment such as the cooling tower, part of the air conditioning system, kind of a technicality but, that devices use a lot of water. We have customers where water from those devices, was being wasted at a rate of around half a million dollars a year. Over $1000 a day of water going down the drain because of a mechanical malfunction that people are not aware of. And if we go in, we identify this problem, and we let them know and they fix it within an hour’s worth of work and $50.00 of parts.
JAMES: The $50 of parts and $100 of labor, and you solve a half–million-dollar problem? Oh, and by the way, a bunch more people have drinking water in the city.
YARON: Exactly right.
JAMES: You know it is interesting. Because when you look at this societal problem with water, let us just set insurance aside for a second, because insurers right now are salivating going, oh my gosh, we can save our buildings, because loss control is always top of mind for insurers. They would rather not have the loss in the first place. And the facility owner as well, aside from the reputational damage and lost time of an actual event that causes damage and prevents utilization. Just their operational losses, of running the building can be significantly reduced. Isn’t it interesting that the water and electric numbers are almost the same? 30% of electricity is wasted and about 25% of water?
YARON: It is. It is interesting yeah.
JAMES: But these are huge waste numbers. They are massive. It is not like it is one or two or three percent. We are talking about a third, a fourth. Colossal, colossal percentages. So, what technology, look here is a lot of people over here in Israel too, and the Middle East, the surrounding nations around Israel that are looking at massive desalinization efforts to try and desal the oceans so they can have more drinking water? That is one way to use technology to tackle the problem of drinking water. I have also seen some interesting projects from your neck of the woods around both billboards that convert moisture in the air into drinkable water. So, there is a lot of technologists putting their mind to work at generating more drinking order, right? I am sure you have seen a lot of these same experiments. What technology goes into WINT that and helps to identify these problems?
YARON: So, the core technology that we use WINT is all around understanding water in a pipe. And we do this by looking at the water flow with very-very high time resolution. Some of our devices will measure millisecond resolution at the water flow rate. And when we look to add that, we then look at it, we think of it as a signal. As you would a radar signal. Or a light signal. We look at the signal and we analyze it, essentially using 3 core technologies. Now the first is signal processing, we processed the signal for various attributes, we then apply artificial intelligence in the shield of learning. To learn what is normal. What is abnormal, to compare to known issue patterns like here is a pattern for a pipe that is about to implode. Here is a pattern for a leaky toilet and so on. And we also use statistical analysis to perform all sorts of comparisons and build knowledge about what is good behavior and what is bad behavior. And once we use this technology, we can identify things like a pipe imploding in the wall or like misbehaving water using a device like a cooling tower and so on. So those are the three pillars. There are all sorts of technology around it but that is the core and the brains and the things that are making us unique.
JAMES: I am guessing that you have to place these sensor networks, and I’m looking at your website, at a device that I’m assuming is placed at multiple points through the buildings so you can narrow down where the leak or the issue is.
YARON: That is correct. We will deploy multiple units in a building, typically one per floor and then a few others in key locations.
JAMES: Okay. And do you, are you also using dry-wet sensors that go on floors in typical weak areas so you can identify if the water is making its way to a dry-wet sensor?
YARON: You know we keep getting asked this question and the answer is that is such a commodity that we can provide it to our customers. The reality is it is a very ineffective technology. This is like, I do not know, 1950s technology.
YARON: If there is enough water on the floor, and it happened to get to my sensor, then I now have an alert that I’ve, that I have been hit. It is a postmortem alert.
JAMES: Congratulations. You just had a problem, by the way, that happened historically.
JAMES: I instead of saying, hey, you are about to have a significant issue. You have a misbehaving device. How do you narrow that down though? Let us say you got one per floor. How do you narrow it down to the cooling tower or a toilet?
YARON: So, you do that by looking at the pattern. You compare the pattern to patterns of similar, although not identical, devices. So, when our, let us say our facility manager in a building gets an alert because the toilet is leaking, you will get an alert saying on the 4th floor you leak a toilet bowl. And so, they will go to the four-toilet bowls in the building and take a look at the one that is leaking. Or it will say, your cooling tower has now gone to a base consumption of something which means you have a problem with your X-part of the system. Or it will, you know we just shut the water off because there was a pipe imploding on the 4th floor.
JAMES: That’s amazing. I mean, so you have identified what at the main level, at a floor main, you have identified that a toilet water leak looks like this. It is a tiny trickle of water and it behaves in this way. It is constantly running, and it is a very small amount. Is that roughly what you are doing? You are doing like flow and pattern analysis?
YARON: That’s exactly right. You look at the pattern, and the pattern for leaking toilet is one thing, the pattern for a pot imploding is different and the pattern for a pipe valve problem in your swimming pool, is different again. And so, we know what these patterns look like. We have mapped many-many of them, and we can identify what it is.
JAMES: That is brilliant. And you are using, you are improving your model. So, you are using some machine learning model, I am guessing you probably do not want to disclose which one it is, and your training this model. Is this a laser sensor or optical sensor that is looking at water flow and patterns?
YARON: So, we are very flexible. We will use most commercial flowmeters. We have specific ones that we think provide better information and we prefer to work with them, but it could be as simple as your water meter from your municipality.
YARON: Or an advanced ultrasonic meter. And this could be in–line, it could be external to the pipe, so multiple technologies.
JAMES: I am not a flowmeter expert, right? So, I am just trying to understand how you get the data off of this. So you using a flowmeter, you’re connecting that flow meter to a data point that you can then send to your servers and then you are running it through, a machine learning model, that, you, as you get more customers, is getting better and better and better. So, I am assuming you are recompiling the model regularly and pushing it back out and then running your analysis through customer, some type of customer feedback where you could train your model right?
YARON: Right, and in fact, we are training the model at two levels. So, we are training the meta–model at the cloud level, looking for multiple systems, but then every location, every device we install sees different patterns that are unique to that specific location. And so, our devices also perform localized learning to adapt what the meta–learning algorithm thought them to the local environment.
JAMES: Okay, so let us talk about residential. I do not see the word residential on your website. Am I ever going to be able to buy your system for my house?
YARON: You know right now; we do not address this market. residentials have all sorts of other solutions. They are fairly low cost, and not that advanced technologically, so we prefer to address the commercial market where is there a problem, the technological challenge is a much higher barrier, and the amount of solutions available is much lower.
JAMES: That makes total sense yeah. Let us tie it into insurance. I am an insurance carrier, I insure commercial properties, I am going to, what, recommend that my customers use WINT as part of their loss control processes or tell me to tie into insurance. I mean they would want to reduce losses through water damage. Are they going to subsidize this through a premium discount, or they going to help buy it for their clients? What is the tie into the insurer?
YARON: So first of all, it is important to note that we are working with two primary different insurance types. One is your P&C so just operational property will need to deploy these things and then we also work very strongly with construction. There is the annual army conference, about a month ago in Seattle for construction insurance. We were pretty well received there I believe, because this is a big problem, not just for an operational property but also for construction. Now, how we work with them is in two different ways. Well more than two, I guess. So, some insurers will say for specific products, either you get a solution like this or we are not game. And we’ve had a situation in a specific building where the building was above a very sensitive underground station, a subway station, and you know the damages could be, who knows, like a leak into the subway station and so they said either put systems from WINT or similar or we are not going to ensure this facility. The risk is too high. So that is one way. Another way is reducing deductibles, we have insurers who are doing this, and another way is just subsidizing the part of the cost to the customer whoever they are. So, we have insurers who are subsidizing us. It is a fraction of big insurance policies, so it is not a big deal and it reduces the risk for everyone.
JAMES: Yeah absolutely. Well, that makes total sense that you that is all the tools in the toolkit right there, isn’t it?
JAMES: How has adoption being so far and what hurdles are you hiding in both insurers and construction companies and facility owners acquiring this? Do some of them simply do not believe that this type of technology is real, that it works, and that it is available?
YARON: Well, first of all, yes. That is always the problem in the early days. I think happily we are beyond that. You know we have some top brand names of customers. So, I think we are over that hump, the belief factor is over. To us, I believe the biggest challenge now is reaching the market effectively enough and providing this because we are still a small company with limited resources. That is the main barrier to us right now.
JAMES: Yeah. Now, your CEO claims to be a diehard American football fan “-“
YARON: He is.
JAMES: And I am as well. He also has the same last name as a very good friend of mine from Tel Aviv, so we are going to have to find out if they are distant cousins or not. But Alon, has he taken you to a football game, did you go to a football game when you lived here, or do you just not share the same passion for American football?
YARON: I am not that kind of diehard, but I did go to a 49ers game when I was out in the area so yeah absolutely. I loved watching football. Alon, he will fly to the earth just to be there on a Super Bowl night
JAMES: Okay, so he is a real nut then?
YARON: Well, I cannot say that. He is my boss.
JAMES: He’s a football nut. That is a good thing! I am a football nut; I am a college football nut though. I like Pro Bowl; I love College Bowl. You know stadiums, speaking of football, have a huge water problem, right? I mean massive enormous water problem in stadiums. They leak like sieves. Have you guys gotten your technology into a soccer stadium or a football stadium of any type yet?
YARON: That is interesting. We did not and I did not know they had such a big problem so that is excellent.
JAMES: Oh my gosh. Massive. Our sister podcast is the contact crew which is all about construction tech and we have been running that for four years and we have had a lot of contractors who have built a lot of football stadiums. Primarily football because that is the big money stadium here in the US. Some soccer stadiums, some baseball, some basketball arenas, but water is such an enormous massive issue for stadiums, and we have had a lot of HVAC and plumbing contractors come in and talk about that. And so, I was just curious. This looks like a prime product for a very high profiled appointment. Maybe into Alon’s favorite football team, you know? You got to find out too his favorite is and then go after them. This is a great team. Let us talk about the business of WINT for a second. Are you guys bootstrapped self-funded? What is the status of the business? How long have you been in business and give us some idea of this scale of the company?
YARON: Okay. So, we have been in business, we have an interesting history, where we started building this technology, originally for the home market and decided to transition it about two years ago to the enterprise space. So, in that space, we are playing for two years. We are playing for two years but with technology that is been stabilized for a much longer period. We have about 3000 units deployed worldwide at this point, anywhere from NY to California. You, if you look at the New York times there is an interesting article about the Atlantis Casino Resort I believe they are Reno’s number one biggest resort. They are using us. We have large construction companies using us, so we are pushing ahead very well, I think. Let us see what else can I tell you about the business.
JAMES: Are you guys, are you guys self-funded? Did you guys bootstrap the business?
YARON: We did not bootstrap. We were funded by some of Israel’s Top Angels. People who build amazing startup companies into very large companies and they are funding us.
JAMES: Oh. Outstanding.
YARON: We are also, it’s interesting, we have a construction developer owner company who is also funding us, their an owner of and part of the company, and they decided to invest in the company after they’ve had the problems, bought the product, loved how effective it was, and today they are running about 40 different construction projects and in every one of them there are using WINT and they are saying that they have never had the construction leak damage after using this and they did before.
JAMES: Can you say which contractor that is?
YARON: Yes, I can. They on our website they are called Tidhar. It is Israel’s largest privately held construction company.
YARON: It is a multi-dollar billion company
JAMES: Well congratulations on that. Congratulations on the account wins. Where can people go to find out more information, I am guessing they can go to WINT.AI?
YARON: That is correct.
JAMES: And check that out. And you run chief product, you are chief product and strategy officer. So, what does your job look like every day?
YARON: Oh my gosh it is crazy. So, I run the engineering team, the marketing team, I do some of the strategic partnerships and technology road maps.
JAMES: That’s awesome. Well look, we appreciate the, you coming onto the podcast, and anything else to tell our listeners out there that our insurance carriers or TPA’s or brokers that are listening into this?
YARON: I think the biggest thing for me is that we can solve a big problem. I think the problem is enormous, they are all telling us how big it is, and currently how unsolvable it is, yeah, give us a call, we would love to help.
JAMES: That’s great. So, apply artificial intelligence and sensors to your water problem with WINT. Check it out at WINT.AI. Yaron in DC, Yaron, you got a fascinating background, my friend. I am stoked to have you on the InsureTech Geek Podcast. Thanks for joining us and thanks for what you are doing to solve a big problem for business and the big problem for the world, man double win. I am fired up to have you on the show and thank you so much for joining us today.
YARON: Hey thanks a lot it has great being here. I appreciate it.
And this has been the InsureTech Geek Podcast powered by JBKnowledge. That’s JBKnowledge.com. It is all about technology that is transforming and disrupting the Insurance world. I have been your Host, James Benham, that’s jamesbenham.com. I am your InsureTech geek. Thanks for joining us this week. I look forward to talking to you soon.