It's a strange time for a new insurance e-commerce player to effectively launch when many existing players are scrounging for available venture capital dollars just to stay afloat.
However, year-old Worldinsure, a Bermuda-based Internet infrastructure provider dedicated to improving the way medically underwritten insurance is processed, recently secured a $20.5 million second round of financing. The new investment brings the venture capital total to $31 million, following an initial investment in April 2000.
But Worldinsure is doing more than just burning through cash, as evidenced by the fact that the company actually has a product that is ready for clients to use. "Royal SunAlliance Life Insurance Co. is going live this month," says Mike Kryza, US co-managing director, Worldinsure. "We just started working with them a few months ago."
"We have been successful so far for a number of reasons," says John Hele, president, chief executive officer and founder. "Unlike other e-commerce start-ups, no money has been spent on advertising. The fact that there have been a number of hiccups in the economy causes the carriers to be skeptical, but we have never had a bad meeting."
Results Not Ads
Instead of advertising, Kryza adds, Worldinsure spent the past year developing its operating system platform and recruiting an experienced insurance and technology management team. Worldinsure management includes Hele, whose experience includes stays with Crown Life Insurance Company and Merrill Lynch, where he advised life insurers on investment management; Bill Krebs, US co-managing director, previously from Merrill Lynch and MassMutual; Kryza, formerly of Western-Southern Enterprise; and Jim Robichau, chief administrative officer, formerly a member the senior management team running John Hancock's Signature Services.
Despite the turbulent market, Hele says, Worldinsure is actually in the right place at the right time. "Life insurance is an awful product," he declares. "It is bad for agents to sell," because it is hard to get all of the necessary information to complete a sale, "bad for customers," because vast amounts of information are required and customers may not hear from carriers for months about the binding of the policy, "and bad for insurance companies," because processing is laborious and expensive. "We make the process easier," he adds.
Worldinsure delivers automated, private label insurance processing solutions to life insurance carriers, financial institutions, employers and insurance distributors, using a predominantly XML-based system, says Kryza. "We manage the entire purchase process. It is easy to integrate with a carrier's system, as carriers do not have to change a lot of processes since Worldinsure uses the carrier's forms and procedures."
Worldinsure's venture capital comes mainly from two strategic investors, Hele says, Sun Life Financial and CIBC Capital Partners.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio