Of all of the areas of finance, insurance may be one of the slowest to adapt to the digital age.
CoverWallet aims to change that, Rashmi Melgiri said. Ms. Melgiri is the cofounder and COO of the company that is reinventing how people buy and manage insurance.
After graduating with an MBA from MIT, Ms. Melgiri worked in finance but not specifically in insurance. But she did work with it enough to see some service gaps.
“Insurance technology was all focused on big carriers and agents, but there was no last mile technology between the agent and end consumer.”
So while the big companies had all sorts of programs with special algorithms to assess risk and provide product recommendations, agents and clients were still completing sales through a combination of in-person visits, telephone calls and faxes.
Ms. Melgiri had met cofounder Inaki Berenguer in business school and the two kept in touch. Mr. Berenguer had founded a pair of companies and new first hand how cumbersome the insurance process was when compared with every other aspect that had embraced automation. The two got together in 2015 and launched CoverWallet that September.
“Our goal is to be the insurance equivalent of Quickbooks,” Ms. Melgiri said.
One significant challenge to over come was the licensing process. Staff have to be licensed in the state of residence for every client they wish to sell to, so CoverWallet had to go through 50 separate state licensing processes for 35 employees. While there was plenty of overlap with questions it was still a cumbersome task.
“It takes time,” Ms. Melgiri said. “It’s not complicated but there is plenty of paperwork and it costs a lot of money.”
Ms. Melgiri said technology in insurance is lagging but not without reason. Most major players are decades if not centuries old with IT systems consisting of patches upon patches. Legacy systems are not easy to update.
The first steps are the hardest ones, especially when you have to communicate a different way to an industry with entrenched systems and beliefs. Ms. Melgiri said CoverWallet has built something that works well on their end but will continue to iterate to produce a system that the end users can get acclimatized to.
“The challenge is how do you marry the online experience with the way underwriting is done today,” Ms. Melgiri said.
Long questionnaires don’t make of a comfortable online experience, nor are they often necessary for proper underwriting. They may be asked because a particular agent had a bad experience with s specific type of claim.
“We are trying to eliminate questions to answer,” Ms. Merlgirir said. “If we can find it and pull it, we’ll do that.”
Most applications cant are completed within 10 minutes, Ms. Melgiri said.
Another challenge is pricing transparency, which is so closely related rot risk profile, Ms. Melgiri explained. CoverWallet addressed this by building up their advice section where staff and clients can share experiences and profiles.
CoverWallet is not a comparison site, Ms. Melgiri explained. They work with select partners that offer broader coverage and address the needs of hundreds of industries in one place. As CoverWallet recognizes gaps they seek out providers who can fill them.
“We are super excited about making this an easier process for small business,” Ms. Melgiri said. “We are looking to Quickbooks and Turbo Tax and saying, why not for insurance?”