Insurance is losing judgment faster than it can replace it; a generation of veteran underwriters is retiring, and the pricing instincts they built over decades leave with them. Rising losses and softening prices shrink the margin for error on every decision, AI-native competitors enter the market built for speed, and most insurers still apply AI to isolated administrative tasks that never touch the core calls about which risks to write and how to price them. Kalepa builds Professional Grade AI for insurance, with agents that perform and coordinate work across operations, underwriting, pricing, and portfolio management instead of automating one step at a time. The platform matches the level of autonomy to each task and its risk, brings in people where expertise or approval is needed, and verifies every result so insurers can trace and audit it, a requirement in a regulated industry where decisions carry consequences for years. Insurers using the platform report a 960-basis-point improvement in combined ratio, and the volume of work running through it grew fourfold in the past year as customers such as W.R. Berkley, Bowhead Specialty, and AmRisc expanded their use. That traction positions Kalepa to become the core system insurers run their businesses on across a $7T global market, starting with property and casualty and extending through the full insurance value chain.
AlleyWatch sat down with Kalepa CEO and Founder Paul Monasterio to learn more about the business, its future plans, and recent funding that brings total funding to $91M, and much, much more…
Who were your investors and how much did you raise?
We raised a $75M Series B at a $470M valuation, led by Updata Partners with continued support from longtime investors IA Ventures and Inspired Capital.
Tell us about the product or service that Kalepa offers.
Kalepa builds Professional Grade AI for insurance. Our AI agents perform and coordinate work across an insurer’s business, helping it grow profitably, operate more efficiently, and make better decisions about risk.
We started with underwriting and operations, from evaluating submissions to executing the workflows needed to quote policies. We are expanding across pricing, portfolio management, and more. Kalepa coordinates AI, software, and people, matching autonomy to the work and the insurer’s requirements, with verification and traceability built into the process.
Our customers range from global insurance groups such as W.R. Berkley to specialty insurers such as Bowhead Specialty and managing general agents such as AmRisc, which underwrite on behalf of insurers.
What inspired the start of Kalepa?
Insurance makes much of modern life possible. It helps people protect their families and homes, enables businesses to invest and grow, and gives society the confidence to take risks. It is also critical to innovation: new industries, from AI to commercial space, need new insurance coverage to develop and scale.
My Cofounder, Danny Hillman, and I worked with insurers at Applied Predictive Technologies. We saw consequential decisions being made with fragmented information and substantial manual work. We believed one of AI’s most valuable applications would be improving how insurers understand and underwrite risk.
We founded Kalepa in New York in 2018 around that conviction. Underwriting and operations were our starting point, and our ambition has grown with what the technology can accomplish.
How is Kalepa different?
Insurance presents deep technical challenges. Understanding risk requires understanding the factors that drive outcomes and how they interact. Insurers have many degrees of freedom in selecting risks, structuring coverage, setting prices, and managing portfolios. AI needs to understand those relationships to do valuable work.
We have spent years tackling these problems, from entity resolution—determining which business, person, or asset information actually refers to—to applying the transformer architecture to understanding risk outcomes. Turning that understanding into reliable execution introduces another set of challenges: coordinating complex workflows and performing work accurately and consistently at the standards expected of experienced professionals.
Those standards are exacting. Insurance is highly regulated, and decisions can carry consequences for years. Auditability and trust have to be built into the system. Insurers need to understand what happened, why it happened, and whether they can rely on the result.
Kalepa brings those capabilities together in production. Across customer deployments, reported results include more than 30-60% higher premium per underwriter, 58% faster quotes, and a 960-basis-point improvement in combined ratio.
What market does Kalepa target and how big is it?
We support the insurance industry, a $7 trillion global market, with an initial focus on property and casualty insurance. Our ambition extends across the industry and the full insurance value chain.
AI can fundamentally change the economics of insurance: how much work an insurer can perform, what that work costs, and how well it understands, prices, and manages risk. That creates an opportunity far beyond automating individual administrative tasks. It reaches the core decisions that determine an insurer’s growth and profitability.
We intend for Kalepa to become the core platform through which insurers run their businesses. As AI capabilities advance, the scope and complexity of the work we can take on will expand substantially.
What’s your business model?
We use value-based pricing. Insurers pay in proportion to the book of business we support and the outcomes that Kalepa delivers.
We build long-term relationships with our customers, and those relationships expand as they deploy the platform across additional teams, lines of business, and workflows. Our growth depends on continuing to deliver value that earns that expansion.
How are you preparing for a potential economic slowdown?
We have built Kalepa with financial discipline from the beginning and have been cash flow positive for over two years. That gives us considerable flexibility. The new capital allows us to invest more aggressively in opportunities we believe will create lasting value, while maintaining the discipline that got us here.
For our customers, pressure on growth and profitability makes the economics of underwriting and operations even more important. Kalepa helps insurers evaluate more opportunities, select business more effectively, and reduce the work required to serve it. Those capabilities are valuable across the cycle.
What was the funding process like?
We had the advantage of choosing when to raise. We had built a growing, cash-generating business, so we could evaluate the round based on what it would allow us to accomplish.
The capabilities of AI and demand from insurers have expanded considerably. We saw an opportunity to accelerate our investment and build a much larger business. That made this the right time to bring in additional capital.
Updata understood both the scale of the opportunity and the way we had built Kalepa. We wanted a partner who shared our ambition and respected the operating discipline behind our growth.
What are the biggest challenges that you faced while raising capital? The raise itself was relatively straightforward. The harder work had taken place over the preceding years: building technology insurers would put into production, delivering results, and growing the business efficiently.
The consequential decision was choosing who we wanted alongside us for the next stage. A financing establishes a partnership that can last many years. We cared about alignment on the scale of our ambition, how we would invest, and how we would make decisions as the business grew. We found that alignment with Updata, alongside the continued support of IA Ventures and Inspired Capital.
What factors about your business led your investors to write the check?
It is unusual to find rapid growth, exceptional customer retention and expansion, financial discipline, and a massive market opportunity in the same business. That combination was central to the investment case.
Kalepa has AI in production doing real work at the standards expected of insurance professionals. Our revenue and customer count tripled in the past year, and the volume of work running through our platform grew fourfold. We achieved that while remaining cash flow positive for more than two years, without raising capital since 2021.
Customers are staying with us and expanding because the technology delivers tangible results. That gives us a strong foundation to lead a much larger opportunity as AI takes on more of the work performed across insurance.
What are the milestones you plan to achieve in the next six months?
Over the next six months, we want to expand both the scope of work Kalepa performs and the number of insurers benefiting from it.
On the product side, that means executing more complex workflows and connecting work across underwriting, operations, pricing, and portfolio management. Commercially, it means broader deployments with existing customers, new customer relationships, and further expansion in Europe.
We have recently brought in senior leaders with experience at Affirm, Addepar, Palantir, Block, and Shopify. They bring experience building technology and organizations at scale, and will help lead this next phase.
We are also adding engineering, AI, and commercial talent. Our broader plan is to double headcount in 2027, but the measure of success is what that team delivers for customers.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Invest in the product and in delivering real, tangible, demonstrable impact for customers. Build something they value enough to pay for, keep using, and expand. That is the foundation for durable growth.
It is tempting to invest heavily in sales and marketing before establishing true product-market fit, effectively trying to buy revenue. You can make the growth figures look good for a while, but low-calorie growth never ends well. Insurance makes that lesson especially clear: it is easy to grow quickly by writing business with poor underlying economics, and the eventual losses can be catastrophic.
We spent years building Kalepa around product investment, customer results, and disciplined use of capital. That required choices about where to invest and what to defer. It also gave us the freedom to choose when to raise and whom to partner with.
Where do you see the company going now over the near term?
We expect Kalepa to take on a larger role in how insurers operate. We started with underwriting and operations, and we are expanding the work our technology can perform and the decisions it can support across the business.
As AI becomes more capable, the division of work between people and technology will continue to evolve. We are building Kalepa to help insurers apply those advances, with the control and reliability their businesses require.
Our focus is on helping customers grow, operate more efficiently, and understand risk better. The new capital will fund the product development, hiring, and international expansion needed to support that work.
What’s your favorite fall destination in and around the city?
In the city, Lincoln Center with my wife and our three-year-old daughter. We love music, and catching a performance is always great. We recently started attending the Chamber Music Society’s concerts for children, and they have been a family hit. Farther afield, we love the fall foliage around Lake Placid when we have the time.
