The technology used to manage and sell employee benefits to small and medium-sized business has long lagged behind the times.
But recently, innovation in the industry has been accelerating, driven in part by increased investment and interest from traditional power players in the benefits space.
One example of this trend has been the growth and development of insuretech startup Limelight Health, which has developed a technology to help benefits brokers quote, underwrite and generate proposals for customers.
The San Francisco, California-based startup recently raised an oversubscribed $33.5 million Series C funding round led by insurer Principal Life with participation from the venture arms of large carriers including AXA, MassMutual, Aflac, Transamerica and Wells Fargo.
Limelight CEO Jason Andrew said the new funds will be dedicated to creating more efficient workflows for users, including the development of AI-based technology for automated underwriting and risk scoring.
Andrew said the company doubled its revenue from 2017 to 2018 and expects to continue that level of growth into 2019.
In order to provide customers an end-to-end experience in pricing, purchasing, enrolling and managing their benefits Limelight’s platform integrates with companies in the ecosystem such as EaseCentral and BenefitsGuide.
Alongside the capital raise, Kara Hoogensen, vice president of group benefits for U.S. Insurance Solutions at Principal and Lerk-Ling Chang, a corporate development executive with Guidewire are joining Limelight’s board.
While the company primarily serves businesses with under 250 employees, it’s working to build the technical capabilities to be able to provide its service to companies with larger workforces.
“Our long term vision is that we want to be standard for how this is done, we want everyone in the industry using our product,” Andrew said in an interview.
“A lot of the work we do is understanding the user journey and their pain points so we can see where there are holes and where we can plug in. If they have very specific underwriting needs, we can do that. If they want to do wholesale digital transformation, we can do that too.”
The rise of association health plans and other potential changes to the Affordable Care Act under the Trump Administration like the increased flexibility of health reimbursement arrangements has added more complexity into health benefits which can difficult for smaller businesses to parse through.
For Limelight, however, the greater number of options have added to the value that its platform can provide in helping business owners make the right decisions for their companies and their employees.
Andrew said that when the company initially launched in 2014, insuretech was still very much a fledgling category and it’s taken some time to build up excitement around traditional players about the potential for new business innovation – or at least the fear of behind left behind.
Which is not to say that there isn’t a long way to go in raising the benefits space up to the level of modern innovation.
“It takes a village to raise a child. We’re the child and the carriers are the village,” Andrew said. “If in 2014 we were operating in 1982, now we’re closer to 1987 or 1990. There’s still a lot of catch-up to do.”
Photo: abluecup, Getty Images