InsurePay predicts wider growth after grabbing pay-as-you-go rival
Fresh off a new venture financing and acquisition, InsurePay’s 2022 will advance with a major increase in investment for product and technology development. Additional hiring is also on tap, according to CEO Adam Beck (pictured).
“These additional hires will be industry veterans with deep insurance and technology expertise,” said Beck, InsurePay’s CEO since January 2021.
InsurePay, an insurtech that launched in 2003, offers insurance companies pay-as-you-go billing options for workers’ compensation and general liability policyholders, using a software-as-a-service (SaaS) model for insurance carrier customers. The company’s expansion plans took a big step forward earlier in January with news that it had nailed down a Series B investment from Aquiline Technology Growth, and other investors including FINTOP Capital. FINTOP was a lead investor for the company’s initial $5 million Series A round of financing announced in early 2021.
Part of the new Series B helped fund InsurePay’s acquisition of Split Limit Studios, a Waltham, Mass.-based developer of pay-as-you-go insurance billing software by way of its TRUEPAY product. InsurePay is based in Nashville, Tenn.
Beck declined to disclose the Split Limit purchase price or the company’s specific Series B funding level, though he said the new venture capital infusion was “substantially more” than the company’s Series A round.
Buying Split Limit made perfect sense for InsurePay’s longer-term strategy, Beck said.
“We are bringing together the best of the top two pay-as-you-go platforms,” he said. “By combining the InsurePay and TRUPAY platforms, our entire customer base can take advantage of the best and most convenient features of both.”
Acquiring TRUPAY also helped accelerate InsurePay’s push to expand its customer offerings, Beck noted.
InsurePay touted its platform during the initial COVID-19 pandemic as a tool that could help improve cashflow during a difficult time. That’s because when policyholders were forced to reduce payroll, they would have a way to adjust premiums concurrently with each pay cycle, giving them access to cash flow they wouldn’t have until the year-end insurance audit adjustment.
Beck said the service is increasingly timely for broader reasons, including cost savings and increased overall demand as workplaces change.
“Progressive demand in the market for pay-as-you-go solutions over the last 18 months has gone from ‘nice to have,’ to ‘minimally acceptable offering,’ to ‘must have’ strategic offerings to remain competitive,” Beck said. “A carrier’s ability to retain policies has become a top priority that can only be supported by options that support a dynamic workforce where certainty is no longer reliable, low interest rates are meaningless and retention is more valuable than an upfront annual premium payment.”
Pay-as-you-go insurance can boost policyholder retention rates but also reduce invoicing and bad debt costs, he said. But the InsurePay platform’s ability to provide real time data also makes reporting, underwriting, commissions processing and claims billing more predictable, he said, allowing carriers to accurately match premium with risk.
Agents can also benefit from the system, Beck said.
“Agents are empowered to offer a more flexible solution to their policyholders and the agent portal allows them to better support their customers,” he said.Post-merger plans
The combined company employs about 40 people, split evenly between InsurePay and Split Limit before the merger. In the short term, InsurePay is working to retain all current employees but also look for potential “gap or bandwidth issues” that could be addressed by new hiring, Beck said.
Split Limit CEO George Kostakos has joined InsurePay as chief revenue officer and the combined company will continue under the InsurePay brand, their merger announcement noted.
By the end of 2022, Beck said that InsurePay will end up with more new employees, a refined post-merger product roster and hopefully a greater market reach.
“InsurePay handles $2 billon in workers’ comp premiums, which is only 5% of the total annual workers’ comp policy premium in the US,” Beck said. That will grow, Beck said, with other growth coming from expansion across additional insurance lines and the addition of other forms of payment methods that the policyholders can use.
“Applying the pay-as-you-go billing model across a minimum of two lines of business (workers’ comp and business owners policy) could easily penetrate a total addressable market of $100 billion in annual policy premium in the US alone,” he added.
As part of the new funding round, Michael Cichowski, head of growth equity at Aqualine, will join InsurePay’s board of directors.