An exciting new wave of HR benefits platform companies – like Gusto, Bamboo, and Rippling – are transforming how employees choose and access their health insurance benefits through richer, more intuitive user experiences. While a small portion of the benefits market today, they are the fastest growing distribution channel and are opening the small group market – a large, but expensive one to serve segment for carriers. As these contemporary platforms are standing up their own back-end infrastructure, they’re encountering some significant technical challenges exchanging data seamlessly with insurance carriers, many of which continue to use older approaches like EDI.
Enter a mega trend that can solve this problem – APIs. The prospect of vastly more efficient API-led approaches to data exchange can both solve the automation conundrum and unlock a modern, digitized set of business processes that will better serve employees, employers, platforms and insurers.
Today, we’re excited to announce our investment in Noyo, the category leader in APIs for insurance distribution. Noyo is intelligently designing a network for the trillion-dollar insurance industry that will keep systems in sync, enabling real-time transactions and data access between technology platforms and insurance carriers. Traditional carriers like Humana and Ameritas are now able to provide much more modern direct-to-customer services and can be connected to newer platform companies.
It’s easy to see how Noyo’s focused approach will benefit both platforms and carriers. For carriers, updating their processes and systems from older protocols and manual data entry will open up more distribution channels to include those that are the fastest growing and the most user friendly. It also opens up the small group segment by taking costs out of acquiring and servicing it. For platform providers, Noyo’s modern API infrastructure means it’s easier to integrate more carriers and more reliably support quoting, group applications, and member rules. It also eliminates current complexities, like every single group and plan requiring a different format, the absence of feedback loops for platforms, and widespread data entry errors. This is a big deal–one data entry error could mean someone’s not enrolled for coverage when they go to the ER for an unexpected emergency.
Most importantly, when insurance carriers and platform technologists work together in this way, they produce a powerful downstream effect for healthcare consumers themselves: the confidence that their healthcare coverage is intact, matches their expectations, and remains ready for use when they need it most. Noyo’s vision will also result in positive impacts for carriers beyond market access and efficiency – better connections make it easier to design and offer better plans.
All of this would not be possible without the deep domain expertise and firsthand knowledge of Noyo’s founders, Shannon Goggin and Dennis Lee. They are true technologists who come to this space after lengthy stints at Zenefits. We’re thrilled by what this powerhouse team brings to the table: insights into the needs and issues of platform creators and insurance providers, exceptional technical and product chops, and an incredibly cohesive working relationship. We can clearly see the path they’ve laid out for Noyo and the potential for transformative effects in the future, particularly helping carriers use data in new ways to accelerate innovation in the industry. Their vision and ability to execute is largely why companies like Humana, Rippling, Ameritas and Beam Dental are eager to join forces.
Zooming out, Noyo represents the latest in our firm’s ongoing commitment to fintech infrastructure, which is fundamental to the success of companies across verticals. Companies that leverage best-in-class technology against fundamental business processes to transform industries and make them more effective are compelling.
It’s a rare industry that doesn’t benefit from a technological fresh take, a modern approach, or a new way of addressing old problems. We cannot wait to see what Shannon and Dennis build with Noyo and are excited to see them combine their big vision with relentless execution to make a difference for everyone who interacts with insurance.