CXA Group is notable for its hybrid approach to employee benefits, one that combines technology with traditional life and health insurance. Established in 2014, CXA Group aimed to capitalise on the fact that medical inflation in most Asian markets is between 7% to 14%, presenting an opportunity to lower loss ratios and ultimately renewal premiums through patient management, in-house third-party administrator (TPA) services, and up-selling.
CXA is also recognised for plotting two distinct paths since its founding, and each is worth considering in turn.
The first path was characterised by a focus on driving down renewal premiums through telehealth, minimising in-patient rates, and chronic disease management programs. Additionally, a defined contribution allowed employers to control and cap annual premium inflation, while CXA’s ‘health score’ aided customers in obtaining reductions on future premiums. Although this approach allowed CXA to shift spend from treatment to prevention, it still required a team that went door to door to acquire new clients.
The second path has seen it become a true technology provider. By establishing a development hub in Ho Chi Minh City in Vietnam staffed by 150 developers, it has re-imagined employee benefits with a white-labelled foundation, on which flexible benefits can be upsold.
In light of these innovations, and considering the evolution of employee benefits, we spoke to CXA’s founder Rosaline Chow Koo (pictured above) about CXA’s journey so far, its current positioning, and CXA’s view of the broader employee benefits market.
TDI: The word ‘platform’ is overused in technology circles. That said, CXA’s new white-label service for large corporates seems like a true platform play. What features of the CXA platform are you most proud of and why?
Rosaline Chow Koo: The CXA platform connects employers and their employees with all the players in the employee benefits ecosystem so that they can shift company-funded treatment spend into early detection, disease management and prevention. This way, employees can personalise their benefits to their individual life stage and health needs, while companies can leverage their existing insurance spend to help improve their employee health. To make this happen, we had to directly integrate into the insurers, clinics, labs, telemedicine, and health and wellness providers, and capture all the source data to make the appropriate product recommendations.
So, the CXA platform is an employer-paid e-wallet with a marketplace for employees to use when they or their family gets sick, when they detect and manage diseases, when they want to get healthy, or to manage their health risk.
And now that we’re white-labelled by banks, telcos and payroll firms, the services have expanded beyond health and insurance into financial services, HR services and data plans.
TDI: What makes CXA different and how will it maintain this differentiation as it rolls out its new portal?
Rosaline Chow Koo: COVID-19 and the economic downturn demonstrated to insurers the need to go digital, integrate with health and to reduce unit costs.
CXA spent years reducing the unit costs of the highly-fragmented and paper-intensive employee benefits industry by digitising the end-to-end insurance journey, integrating all the players in the value chain into an ecosystem and eliminating intermediaries such as agents, brokers and TPAs.
CXA’s company funded e-wallet allows employees to shift duplicated spousal group coverage into voluntary benefits or other health and wellness offerings, and we’ve had worksite penetration rates of up to 47% for digital app sales.
So, we are well positioned to help employers as well as insurers post COVID-19 to go online with highly discounted digital health and insurance offerings.
TDI: CXA is active in several markets including Singapore, Malaysia and China. How have you navigated the differences in consumer behaviour, and how will you navigate the varying profitability of voluntary benefit products in these markets?
Rosaline Chow Koo: We actually localise and integrate with local insurers and health and wellness players in each country as the employee benefits landscape and consumer behaviour are different.
TDI: Several life and health insurers are moving away from generic ‘health wellness’ programs and towards screening for diseases in a more tangible way, combined with actively routing claimants to lower cost hospitals. How does CXA view this shift in terms of the future of employee benefits, and the development of life/health insurance as a whole?
Rosaline Chow Koo: We agree with the shift as we upload health check-up results from the labs to our mobile apps and personalise recommendations for disease management and insurance. We also connect directly to affordable clinics, specialists, telemedicine and disease management providers, so eliminate onerous TPA charges.
TDI: Is it right to say CXA has pursued two distinct paths since inception? The first focused on large corporates and driving down loss ratios through tailored content, chronic disease management, and an in-house TPA. The second is a pure tech play that delivers a scalable employee benefit service for corporate partners as a precursor to up-selling voluntary benefits to SMEs?
Rosalind Chow Koo: They are actually an evolution of the same path. We started by going direct to the Global/Fortune 500 with our brokerage model, which helped us build the insurance journey and ecosystem. And then once we won the bancassurance platform deals, we upgraded our monolith portal into a microservices platform to be white-labelled by the banks to cross-sell employee benefits to their enterprise clients. We up-sell group, voluntary benefits, and personal lines to the Fortune/Global 500 and will continue to do so for the banks and insurers to their SME, high-net-worth, and retail customers.
TDI: CXA has an impressive list of corporate clients for its new white-label employee benefits service. Can you describe how you work with your partners?
Rosalind Chow Koo: CXA’s health, wealth and lifestyle SAAS platform is being white-labelled by banks, insurers, telcos, payroll and healthtech firms for their captive enterprise, high-net-worth and retail customers.
The reason they are using CXA is because our company-funded e-wallet and data allows them to digitally cross-sell the right products to the right customers at the right time. For example, since we know when people get married, the banks can cross-sell bundled solutions such as mortgages with homeowner’s insurance and auto loans, with auto insurance plus life insurance for the new spouse. We also know when employees leave companies so cross-sell life and medical continuation coverage and keep the B2B2C employee as a direct B2C customer.
TDI: Finally, the essence of enterprise software is to bring a standardised and scalable solution to a previously analogue and labour-intensive process. How will CXA reconcile the different data formats and internal protocols at various banks and corporate partners, while maintaining a one-size-fits-all architecture?
Rosalind Chow Koo: We use APIs when possible, but also have data mapping tools to ingest, cleanse and structure different data formats from the different providers in different countries. That way, the core back-end modules can remain the same while we customise the front-end applications for different clients. 80% of our microservices platform is reusable so is highly scalable.
CXA is a good example of a challenger within a well-established sector. By white labelling an employee benefit experience for banks and corporate partners, who in turn pass CXA to their own SME clients, CXA has differentiated itself from legacy brokers. While it is clear that CXA is becoming a true technology player, this model also has its challenges, as large corporates typically ask for a customisation. In a sense, CXA is the fulfilment of a model first envisioned by Zenefits almost a decade ago in the US, whether it can now fully realise that vision will be interesting to observe.