A Conversation about Insurtech with Matt Ranauro
"It's no secret getting healthcare coverage can be challenging and complicated. In fact, it is a process that can be downright painful… and take an incredible amount of our time.
Two years ago Matt Ranauro, Founder/CEO of Benefix, felt this pain first hand, and decided to do something about it.
Ranauro, who has a background in technology and design, co-founded several tech companies, he has built apps for HBO and Nickelodeon, analytics platforms for KPMG and technology products for The Mayo Clinic.
Each time Ranauro has started a company he needed to find health insurance for himself and his employees. But getting the proper coverage took way too long. "I waited about two months just to find out what was available, then get enrolled in those products." He said. "Which is absolutely crazy, right? It's 2017!"
If Matt was having this difficult of a time getting health insurance, he knew he knew there were millions of other small businesses having the same problem. The question: how do we streamline this process and make it not just better, but change the way small businesses access benefits?
The answer: Insurtech. Ranauro dove into the insurtech industry, learning about the current process, how brokers work with small businesses, if there was a need from the brokers and agencies for technology, and once it was clear there was a massive need – Benefix was born.
Ranauro's company, Benefix, gives health insurance brokers an all-in-one digital platform to manage their small business customers; a CRM, real-time and 100% accurate quotes across multiple benefit products and even the ability to enroll in products directly via Benefix.
Recently, Renauro shared his insights with Patch.
First, what is InsurTech?
Insurtech is loosely defined as the technological and digital innovations that are being designed for the insurance industry. The technologies streamline processes, improve communication and make the industry, as a whole, more efficient, effective, and less error-prone.
Insurtech isn't specific to the health insurance and health benefits industry. It's a blanket term that covers all types of insurance. For instance, Root Insurance is the nation's first car insurance company powered entirely by mobile. It recently expanded its services to drivers in Illinois, Utah, Oklahoma and Indiana.
How long has InsurTech been around and why should people care?
A few companies began raising funds for insurtech initiatives back in 2010. By 2015 the industry had garnered $2.12 billion, $1.39 billion in 2014 alone.
Today, the insurtech industry is worth $4.5 trillion.
So, people should care because this is a sizeable, growing, industry. But really they should care because going digital is the only way we're going to solve many of the problems in our healthcare system. People like to blame politicians, but legislation (good or bad) isn't the only issue.
Right now we have an antiquated, often paper-based, system. Multiple people are involved in creating and implementing benefits packages. It only takes one small error to cause a giant headache for the end-user — the person who's relying on that health insurance to be there in a time of need.
At this point, there is no single, unifying, digital platform out there that houses the data about the insurance plan and the enrollees, or easily integrates all the information available. This is a problem not just because of the human impact but because of the cost.
In terms of expense, much of it comes from the inefficiencies inherent in the current system. There was an interesting report out of Temple's Fox School of Business a few years ago. Research showed that on average, a $1 increase in the budget of state chief information officers (CIO) lead to a $4.05 decrease in "current expenses and capital depreciations."
Imagine if the health insurance industry, which rivals most state governments in terms of inefficient and antiquated systems, could see that level of savings by investing in the right technology?
People have been looking to the government to fix this fractured, expensive system. Insurtech offers solutions that require no legislation or public debate. We need this to happen.
Why hasn't this been done already?
I've thought about this one a lot. The healthcare industry is huge. Most reports state that it accounts for about 18 percent of the GDP in the U.S.
Huge organizations, in any established industry, have a hard time being innovative. It's partly a "can't see the forest for the trees" issue. That is, from inside the company it can be difficult to get the big picture view needed to solve a systemic problem. Benefits carriers also have legitimate concerns about disrupting the business and affecting revenue. These aren't tech companies that are facile and comfortable with adapting to new digital platforms.
What does this mean for the stakeholders currently in the health benefits industry?
Their lives will improve, period. Insurtech will let all the stakeholders in the health insurance industry– brokers, carriers and the businesses that need benefits packages — be able to work together in ways that are more efficient. Clear, accurate, information will be available in a way that it's currently not.
Also, as millennials continue to enter the workforce they'll have benefits tools and platforms that are familiar to them. A lot of the growth in the insurtech industry stems from the expectations of younger consumers.
Any last thoughts?
I have yet to meet a single person who has good things to say about their experience with health insurance. Benefits touch every person in our country, and they need to be made simpler and more cost effective for everyone.
This problem is not unique to the relationship between the insurers, brokers, businesses and those covered. It permeates the entire ecosystem that is the healthcare industry, from patient to provider to payer. Insurtech is solving many of the problems and it's time to embrace it.