Collectively, small businesses employ more than 50 million Americans. Many of those businesses offer health insurance to employees, but if a company only employs 18 people it’s not going to attract the same attention from insurance companies as one that employs 10,000. Massachusetts startup InsuranceMenu, which is currently going through the Global Insurance Accelerator in Des Moines, is seeking to improve options for insurance carriers that sell to small businesses.
How InsuranceMenu works
InsuranceMenu got its start in 2011 as a way to help control rising health care costs for small business owners. Larger companies usually have a staff or hire a service to help administer benefits like health, dental and disability, but smaller companies (under 100 employees) often rely on independent agents.
“Small businesses have pretty much been left out of the tech revolution,” said InsuranceMenu co-founder Nabil Aidoud. “For smaller companies, the market is too fragmented. Technology is the only way to adjust this market. We think we bring efficiency to independent agents.”
The goal with InsuranceMenu is to work with larger carriers to make it easier for independent agents to sell their products to small businesses. Currently, those agents are often selling insurance using stacks of brochures or working with Excel spreadsheets. InsuranceMenu replaces that with online quoting and enrollment systems.
Creating stability in an unstable market
InsuranceMenu formed shortly after the Affordable Care Act (ACA) was passed. Congress recently tried to replace the ACA with the American Health Care Act but that bill didn’t make it to a vote. An ACA replacement may still be lurking in the wings, though. Despite potential changes, Aidoud isn’t concerned about how it might affect InsuranceMenu.
“I think what the Affordable Care Act did for us was draw a lot of attention to how important the purchasing decision is,” Aidoud said. “Regardless what it evolves into, it definitely awakened the industry to the role of technology. I think we benefited from all the attention. Before the ACA or the new bill, people had been buying insurance and benefits for decades. That’s not going to stop, regardless of what happens on the political front. But it has created the need for someone like us to make it more efficient.”
Why the GIA is interested in InsuranceMenu
Global Insurance Accelerator managing director Brian Hemesath said that InsuranceMenu focuses on a market that is largely ignored, presenting new opportunities for growth in the industry.
“InsuranceMenu has a product that is ready to go and there’s a tremendous opportunity for them to get their product into the market right now,” Hemsath said. “We’re giving them a challenge to their business model, and I feel confident that Accelerator is going to give them a good idea of how to enter the market.”
Aidoud said InsuranceMenu entered the GIA not to create hype or raise capital, but to find strategic partners.
“The Global Insurance Accelerator is backed by the insurance companies that will ultimately be our customers,” Aidoud said. “This experience lets us roll up our sleeves and ask questions of our potential customers in a safe environment. We’re getting the inside scoop on what really matters to them.”
Aidoud believes that doing business in Iowa will be a lynchpin to expanding InsuranceMenu, and hopes to establish a presence in Iowa as a launching point for a larger Midwest presence.
The future of InsuranceMenu
InsuranceMenu’s platform is already operational in Massachusetts, and Aidoud thinks it will be available in other states before the year is over. Looking down the road, he sees a much bigger potential for the company.
“I don’t think we want to be working with every carrier, just carriers that really want to grow in this space,” Aidoud said. “We want to find carriers that want to work with the agents that deal with the end customers, which are small businesses and their employees. I think we could end up in the hands of hundreds of thousands of small businesses and working with agents who will help grow this category of insurance greatly over the next 20 years.”
Joe Lawler is a freelance reporter based in Des Moines.