Finaeo said it is banking on using application programming interfaces to personalize the sales experience. Its integrated digital platform collects customer data transparently, it explains on its website. The concept won over Hub – one of the largest MGAs in Canada – and the insurtech is already building bridges in the United States.
The insurtech also raised $5.35 million from Luge Capital, a venture capital firm. The president of Finaeo, Aly Dhalla, said that this financing will allow him to turn to the American market. He told Insurance Portal that the company has been licensed to do business in 20 states.
Presently, Dhalla said he is focusing on the Canadian market and his agreement with Hub Financial. Known for being a brokerage advocate, Alister Campbell recently joined the insurtech’s board of directors. CEO of the P&C Insurance Compensation Corporation (PACICC), Campbell previously served as CEO for Zurich Canada and The Guarantee Company of North America.
HUB Financial CEO, Terri Botosan, said she believes it is a good time to move forward with insurance technology. Finaeo provides the advisor with technological support throughout the sales process, from the moment the advisor meets the client. She says she believes that this digital platform can help advisors to grow and optimize their business.
Finaeo aims to help independent advisors turn their prospects into customers. “Finaeo helps independent insurance professionals take their clients from ‘prospect-to-policy’. We provide advisors with free digital tools to onboard their clients, complete needs assessments, quote, compare and apply for life and other insurance products from our marketplace,” said Dhalla. “Insurers can digitize their products for free and have access to a "digital storefront" to market and distribute their products.”
He adds that “Finaeo only distributes through advisors and does not sell insurance to customers directly. We believe in the value of advice and have partnered with Canada's top MGA, Hub Financial, to bring this to market with the country's most innovative carriers. Finaeo shares commissions on each transaction it helps place.”
Dhalla says Hub helps bring big carriers to the table. “We are very encouraged with the momentum,” he said.
Formerly a financial planner for TD Bank, Dhalla then worked for a group insurance platform, and then migrated his ideas to the individual insurance sector, which he said presented significant business opportunities. “The supply chain of individual life insurance is the same as in the benefits sector. And it is the last part of financial services to truly go digital,” he said.
In his opinion, the industry needs infrastructure to allow systems to speak together, application programming interface (API) and better connectivity. “I saw great opportunities to use my experience as an advisor and as a technologist,” he said.
No direct sales
He adds that “Finaeo only distributes through advisors and does not sell insurance to customers directly. We believe in the value of advice and have partnered with Canada's top MGA, Hub Financial, to bring this to market with the country's most innovative carriers. Finaeo shares commissions on each transaction it helps place.”
For the time being, HUB Financial is testing Finaeo's digital platform with its partner advisors, who are the top 20 per cent of the MGA’s 6,000 advisors in terms of productivity. Among these partner advisors, Botosan estimates that about 400 are using Finaeo's services.
The agreement between the Hub and Finaeo is not exclusive, but HUB Financial remains the only MGA partner for now.
Dhalla said he believes more and more advisors will start using Finaeo’s platform because of the API. As for MGAs, the benefit is the opportunity to offer enhanced service. “We believe the value of MGAs is going to change. They need to be strategic providers of technological tools, to help independent advisors to grow their business.”
