Cover Article from HealthcareInsights, January 2022
Interview with: Michael Kelly, CEO, FINEOS
Insurance has become a hotbed of digital innovation. In response, insurance carriers must embrace change and rethink their old-school business models to enhance customer experience. The monolithic insurance software models of the past are no longer sufficient to meet the current needs of the modern insurance carriers who must satiate the rapidly increasing demands of their customers. Today, carriers need a modern purpose-built, customer-centric core platform that can offer improved operational efficiency, increased effectiveness, and excellent customer care. And this is precisely where FINEOS, a global market-leading life, accident, and health insurance software company comes into the picture.
The FINEOS Platform is a leading-edge industry SaaS platform that combines a flexible, innovative core insurance suite with digital and data capabilities for life, accident and health insurance carriers. The company facilitates and provides complete customer experiences and delivers the required information to empower a smarter, more responsive, and more agile business.
Fascinating Journey of FINEOS
The journey for FINEOS originally began in 1993 when Michael Kelly left Europe’s largest life core systems vendor to build a modern technology suite to help life assurers provide great service to their customers. In those days, insurance carriers didn’t understand very much about their customer. Their core systems were policy record based and the bulk of their activity was broker based – they more or less treated the broker as their customer. So, FINEOS came into existence to put the customer, i.e. the person who pays for the product, into the center of the life insurance carrier’s world. In focusing on the customer service or the customer care journey, FINEOS zeroed in on the claims aspect, which is the most essential customer service a carrier will ever provide. In 2004, FINEOS developed a completely new customer-centric claims management software system using a core technology stack based on Enterprise Java and ORACLE.
“Our message to the carriers back then was deliver a great claims experience and you’ll have loyal customers, a great reputation and a healthy growing business.” The message was simple and one that everyone gets today, but back then it was almost revolutionary in the carrier world, as they were way more focused on new business sales and the launch of new products than on customer service. When you think about it, the whole reason a person buys insurance is to experience a great claims service if they ever need it. Hopefully, they won’t need it, but when they do, they really want to be looked after. The claim is ‘the moment of truth’ – where the opportunity comes to the carrier to really excel and build a long term trusting relationship with their clients. If the carrier messes up on the claim then the customer is lost for ever! This is why FINEOS was created: to help carriers care for the people they serve through the delivery of superior insurance technology,” asserts Michael.
Expanding from Claims to an Industry SaaS Platform for Life, Accident and Health
FINEOS built and maintains a global market leadership in life, accident and health claims. Carriers use FINEOS to auto adjudicate, accurately make payments and to optimize their customer service and care for claimants. A proper claims process remains critically essential as it seriously effects people’s lives. The FINEOS Claims system provides carriers with the key to claims administration while also automating the claims process, which enables the carrier to spend the maximum time dealing with the human aspect of caring for the customer. In 2014, FINEOS decided to expand from claims management to build a wholly unique new core suite to manage absence, claims, billing and core administration for group and voluntary insurance carriers. The new core suite would be architected and developed to support the SaaS business model from day one. From a strategic perspective, FINEOS could see cloud computing and the SaaS business model as the game changer and a complete paradigm shift that would enable carriers to transform their business models and move away from their dependency on legacy core mainframe systems. This next phase of the FINEOS journey has been a transformation for both FINEOS and the many FINEOS clients worldwide who use the FINEOS Platform today. It has helped FINEOS accelerate to become market leaders in total absence management for Employee Benefits carriers, as well as also delivering the complete FINEOS Platform, an industry platform for group and voluntary policy administration. Today in the US, the FINEOS Platform supports a $4.5 billion book of group benefits business in production, having eliminated many legacy systems along this implementation journey. A number of other carriers are actively planning their move to the full FINEOS Platform.
Expanding on its strategic growth journey to provide carriers a complete core system, FINEOS, purchased Limelight Health for US$75m in 2020. Limelight was an employee benefits insurtech focused on providing quote, rate and underwriting capabilities for group insurers. Similar to the FINEOS Platform, Limelight was created as a SaaS platform, so it was a natural fit that enables FINEOS to now also offer New Business & Underwriting capabilities to group carriers. “We’ve gone from a claims only on-premises vendor eight years ago to becoming an end-to-end industry SaaS platform for core digital and data, including quote, rate, underwrite, absence, claims, billing and policy administration for group and voluntary carriers. Carriers can implement the FINEOS Platform as one core end-to-end system for group and/or voluntary business; on a component by component solutions basis; or a combination of capabilities to solve unique market solutions, for example to solve pain points such as new business, billing, claims or Integrated Disability and Absence Management (IDAM). It’s a very robust but flexible solution that enables carriers to embrace the FINEOS Platform when, where and how it best suits their business needs,” adds Michael.
Attributes that Differentiate FINEOS
FINEOS is singularly focused as a vendor on one single industry segment and continues to invest heavily to build up a market lead with over 60 clients in this segment. The company serves large clients like the Accident Compensation Corporation (ACC) in New Zealand, where it covers all the accident and health claims for the whole country, as well as small clients in the private sector with 20 or 30 users using its full platform. All of the FINEOS products seamlessly integrate into a single suite or they can be implemented and integrated into existing environments as stand-alone product solutions.
FINEOS is delivered in a SaaS business model, which saves carriers unnecessary time and expense over the old-on premises or hosted cloud systems. “We move in very quickly when a carrier wants to deploy FINEOS and have them up and running very fast. This gives us a big competitive advantage. We have a track record of success in implementations and continually, upgrading the carrier with our latest features, content and technology advances,” opinions Michael.
FINEOS implements and then quickly scales the platform for the carrier, providing a secure, agile environment to enable them to move forward with a modern digital core solution that enables them to optimize their customer experience. Leveraging the potential of machine learning and predictive analytics, it creates insights and automation around the data to derive the best outcomes for the carrier and their customer.
Keeping Clients at the Forefront
FINEOS works directly with its clients and runs numerous practice groups where product managers work closely with the people who are using the FINEOS Platform. The company shares roadmaps with clients, giving them input and insights into where the company is taking the product. FINEOS keeps in touch with its clients at multiple levels and on regular occasions. The company listens and learns from clients and works to keep them briefed and alerted to ongoing and likely future market trends, both threats and opportunities. “We believe the best way to keep our clients satisfied is to deliver more of what they want in our platform, retaining our focus on the customer service element and also by keeping our training and education focused on ensuring they gain the best out of FINEOS,” affirms Michael.
Continues To Foray Deeper Into the Industry
Today, FINEOS stands tall as a market leader among life, accident, and health insurance technology providers. The company underwent the IPO process in August 2019 and to date has raised Au$375 million to support its growth strategy. FINEOS made two acquisitions, Limelight Health, as mentioned earlier, and Spraoi, a North American insurtech specializing in machine learning and automation solutions in the life and employee benefits market: efforts are underway to integrate both acquisition capabilities into the FINEOS Platform. In addition, FINEOS continues to invest in a very healthy R&D program to sustain the FINEOS trajectory as the leading industry platform for life accident and health insurance. Forging ahead, the company aspires to further expand its reach and help carriers who want to advance their digital strategies and take their technology to the next level. FINEOS has market leadership in the North American markets and building upon its existing market leadership platform in Australia and New Zealand, the company plans to unlock opportunities in the fast growing Asia Pacific region. “Today we’re very much focused on the Asia Pacific markets and we see this region as a large growth opportunity. As the Asian economies grow, so will the life accident and health insurance segment. We want to be a part of this exciting growth story,” concludes Michael.
Originally published in HealthcareInsights, January 2022