SME Spotlight

Tailoring insurance to suit needs

Ms Rosaline Koo, founder and CEO of CXA. Ms Koo forked out $5 million of her own money and worked out of her home for a year to build a platform that allows employees to choose benefits that suit them.
Ms Rosaline Koo, founder and CEO of CXA. Ms Koo forked out $5 million of her own money and worked out of her home for a year to build a platform that allows employees to choose benefits that suit them.PHOTO: TED CHEN FOR THE STRAITS TIMES

Many local firms have sprung up in the health and wellness space over the years. This week, CXA founder and CEO Rosaline Koo, 52, outlines how her firm is reshaping employee insurance schemes. Fabian Koh reports

Q What does your company do?

A What we are trying to do is let employees choose the benefits that suit them.

Right now, what probably happens is companies spend like $2,000 on insurance for each employee.

But, sometimes, you do not go to the doctor or hospital, and that $2,000 is not used at all.

What happens if I can free up that money for you, and you can decide what to do with $2,000 each year?

What we've done is aggregated all the gyms and yoga and pilates studios, and even put in travel or car expenses and more.

You can shift the money and use it how you want. That's the basis of what we do.

Q How did you grow initially from such a small company?

A We bought a giant company when we launched, acquiring Singapore's largest employee benefits broker, a 21-year-old company called Pan Group that had 80 people. I spent $5 million of my own money, and got a loan from DBS to fund the rest of the acquisition.

This was February last year, and in March we launched.

KNOW WHAT PEOPLE NEED

Truly understand your clients' needs. During our year in stealth, we showed our prototype to people and asked them if that was something they wanted, and they actually helped us improve the design. So, be really humble, and don't think you know it all.

MS ROSALINE KOO, giving advice to budding entrepreneurs

Q What were you doing before starting CXA?

A I was working in a company called Mercer Marsh Benefits. They are a New York-based firm, operating in about a hundred countries.

I was the head of Asia Pacific for eight years, heading 14 countries from the Singapore headquarters, including the Asean region, China, Japan, South Korea, India, Australia and New Zealand.

I told them that the company could grow much more if they invested in technology, but they didn't. So I went off and built my own company.

Q How did you actually start the company?

A I built it in stealth.

For a year, I wasn't supposed to approach clients of my old firm, so I did not.

So, when I was hiding in my apartment in Orchard, I told everyone I was busy getting my daughter ready for college. But in reality, we were secretly building a platform!

We are like a tech start-up outside of Silicon Valley, in Singapore.

Q What are some memorable events from this "stealth" stage?

A I have a dog and two cats. So the dog would bark all day, and my daughter was practising for her eighth grade piano exam and constantly banging on the piano.

So, when we had a conference call with DBS to negotiate for the loan, they would be like, "Why is it so noisy?" and I'd blame it on the neighbours and thin walls!

Q How many staff were there initially?

A Initially, there were 10 of us working in my apartment.

One guy was commuting from Kuala Lumpur, so he stayed in one of my bedrooms. I would wake up at breakfast and get a shock as I'd forgotten he was there.

Also, when I spent my $5 million, I made my daughter go to work so we could afford her college tuition fees, and I made my husband go back to work too, since I had spent all our money.

Q What sets your company apart from your previous employer?

A They don't have the tech tools.

While we are both insurance brokers, CXA is digital and provides more services.

My platform integrates with both insurance companies and service providers. I bring everything directly to the companies and the employees, eliminating every piece of paper.

For example, you can take a picture of the doctor's bill and upload it onto the platform for the insurers.

So, we are bringing new technology to an old industry.

Q What other services does your platform provide, other than being a marketplace for services?

A It keeps your health records. All your health checks get uploaded.

There is a questionnaire on lifestyle habits, such as eating, exercise and sleep. We then use face ageing technology to show how you will look if you keep up that lifestyle.

Companies use this to educate and encourage employees.

We also produce annual reports for companies to see the summary of claims, and they can understand the link between employees' health and the company's finances.

Q Just how big is the market operating on your platform?

A I already have 250 service providers in Singapore, ranging from insurance providers to those in the wellness industry and health apps.

We have 500 companies using the platform for their employees now, and by the end of the year we'll have 100,000 users.

At the launch, we had just three companies on board, but they are the top global tech companies.

Q Any plans to go global?

A In late June, we opened our office in Hong Kong.

We have attained our licences for China, Indonesia and the Philippines, but we need to get local vendors and insurance companies on board before we can launch.

I'm about to do another acquisition, so I think we'll be in 12 countries by the end of the year.

Q Do you intend to get government funding for overseas expansion?

A We do not get funding from the Government, but from institutional venture capitalists.

In February, I got $8 million of funding on our first round. We are about to do another round to attract more investors, and this time, we are looking to raise $50 million to pay for the acquisitions.

Our value went up 400 per cent within the last year.

Q So what is the exit strategy?

A I don't believe in going public, because you tend to worry so much about stock price that, sometimes, you make very short-term decisions instead of investing for the long term. Also, you cut costs, sometimes to the core, and that is really bad for the employees.

I would prefer our exit to be a trade sale. We already have at least 10 offers, but I'm still holding out.

Q What about the platform itself? Any plans to sell it?

A The really big firms want to use my platform with a private label. This means my platform will have their brand names.

But I'm licensing it, not selling it. So everything they sell, I get a percentage of it.

Q Any advice for budding entrepreneurs?

A First, you have to solve a problem that is a paying point.

Second, truly understand your clients' needs.

During our year in stealth, we showed our prototype to people and asked them if that was something they wanted, and they actually helped us improve the design.

So, be really humble, and don't think you know it all.

Lastly, hire the best talent and treat them really well. I gave away 20 per cent of the company to my employees. They have shares, giving them a sense of ownership and belonging to the company.

A version of this article appeared in the print edition of The Straits Times on August 05, 2015, with the headline 'Tailoring insurance to suit needs'. Print Edition | Subscribe