E21 – Stacy Varney of ClaimVantage on Claims Insurtech in L&H Insurance and Leave Management

In this episode, I spoke with Stacy Varney, Global Head of Sales and Marketing at ClaimVantage. ClaimVantage has created a cloud-based solution for Life and Health insurers. We discussed their solution and how they build a new product line in leave management by listening to their customers and jumping on an opportunity created by complexities in federal and state laws.

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Connect:
Stacy Varney (LinkedIn) https://www.linkedin.com/in/stacyvarney/
ClaimVantage Homepage – https://claimvantage.com/

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Transcript

Nick
Okay, and we're live with one of my first early morning sessions so you can see the sun kind of coming through the blinds here, blocking me, but I'm with Stacy Varney. Stacy, good morning.

Stacy V
Good morning.

Nick
Thanks for taking time out of your schedule.

Stacy V
Happy to join you on a sunny morning here in Maine as well.

Nick
I know so we got the hopefully the entire east coast is finally basking in some springtime weather. We're going to be talking about insurance and claims and Insurtech. And so Stacy, why don't you introduce yourself and your company and spend a couple minutes give us an elevator pitch.

Stacy V
Okay, well, Hello, everyone. Great to be here. Thank you Nick for inviting me. My name is Stacy Varney and I'm the Global Head of Sales and Marketing for ClaimVantage. ClaimVantage is a technology company focused in claim management and leave management. And I'll talk a little bit about what that is. We're a SaaS company. The company was built back in 2006. With the founder Leo Corcoran, who had been in the technology sector for about 30 years, decided that he wanted to build his own company and he wanted to do it differently. So he started the company out, wanting to provide an entirely new experience for people that manage claims in the life and health sector of the business. And so that was our primary focus in the beginning, and he started the company and started building the company, launched the first product in 2008. And shortly after that, he realized that it wasn't different enough. So he reframed. It was an interesting time 2008 as many of us remember. So he reframed and said, You know I need to I need to really think outside of the box. And that's when he decided that he was going to rebuild the software on the cloud. So we became cloud native 10 years ago. He chose Salesforce as the platform after a lot of consideration of other options. And I remember fondly back then because I knew Leo, before I joined the company, that he was truly a visionary, building a claim technology system on Salesforce cloud back in 2010, when still most people didn't know what cloud was. They only knew Salesforce as a CRM solution. And it was it was a very bold move for him at the time. And one that's proven to be you know, just a brilliant decision.

Nick
Yeah. So it's, it's funny, I don't mean to interrupt you. Going back that far, when you say something like you know what there wasn't there weren't a lot of visionaries when it came to the cloud, which is like really funny. And I remember specifically working with a couple of companies that made software that just like, give us the use cases, like we can't think of any, you know where the cloud is. And here it is, like it just, it really took a visionary to kind of think forward what the cloud was actually going to do. But I digress. I apologize. Please continue.

Stacy V
No, no, it's, um, it's great. I agree with you. And and I remember, at the time, I was with a large global reinsurer, I was interacting with Leo in the industry. And you know, I, I was introducing him to insurance companies at the time. I just really liked him and what he was all about. He's Irish, so everybody loves to talk to him, you know, and he's lived in the states for about 20 years, but he has not lost that wonderful accent. And, you know, I introduced him to a lot of my clients at the time. And you know, some people just thought, What is he thinking, you know, what is this cloud all about? Yeah. Oh, how safe is our data out on the cloud?

Nick
Who owns it?

Stacy V
Right? What again, what is the cloud? What does that mean? And, and, you know, the events of the past few months, have only solidified the fact that he made a wonderful choice. And, you know, customers, obviously, that have adopted our technology and a cloud based and have been, you know, they're, they're moved to remote work was so easy and seamless. There were no business continuity issues. So Cloud was a great choice. He hadn't probably anticipated you know, what would happen 10 years later and the impact that cloud technology would have on the entire you know, industry and not just the insurance industry.

Nick
Can you...so...I heard you say life and health correct?

Stacy V
You And that's a broad term. So we're not in the P&C business, we're in the health business. So the products managed on our claim solution, run the gamut from life and disability to all of the voluntary products that carrier sell both individual insurance companies, group insurance companies, we are a global company. So we have insurance companies spread out across we call them three different geos, North America, EMEA, and APAC. And we've got, we've got offices in all three locations. So our home office is actually in Dublin. And we have a team of about 40 people there. It's mostly our development team. Not 100% but mostly development team. And and then our office in Portland, Maine is I'd say mostly the business team if you think about people who have deep industry expertise in insurance and and leave management. Now, I want to talk a little bit about that as well. And then we have an office in Melbourne, Australia, and, that team supports our customers in APAC. But you know, they're a combination of both business developers. And I just recently hired a new sales except there as well. Yeah.

Nick
Offsites must be awesome. Surf in Melbourne, lobster in Portland and Guinness in Dublin!

Stacy V
Pretty much, pretty much there's a there's a there's a lot to do in all three locations. But you know, the geographic differences makes it challenging at times. We often find that we you know, we have to accommodate early early morning meetings to get everybody on the phone or sometimes, you know, late evening meetings to get everybody on the phone. But fortunately, it's such a wonderful team and everyone really enjoys interacting that we make it work.

Nick
So the the name "claim" is in your name. It's in your, the name of the company. So can you talk about like particular use cases? So it's a SaaS company is that you had mentioned leave as well. But can you talk about the types of claims that your software handles and automates?

Stacy V
Yes. So we have three primary markets that we serve insurance carriers globally, third party administrators globally, and then large corporate accounts of large employers in the US today. And so our, our software accommodates all three of those, those market segments, okay. And again, you know, all claim types in that life and health sector. So, for example, in APAC and the, the, what we would call worksite products in the US, they call health products, critical illness, you know, cancer for example...

Nick
Disability.

Stacy V
Exactly.

Nick
Even like long term care?

Stacy V
Yes, yes, that's not as common in the global markets as it is in the US. But you know, they call them different things. So disability in APAC, and actually in Europe is called income protection. So IP, or, you know, total and permanent TP, you know, claims, so, different varietals, but essentially the same products.

Nick
Yeah.

Stacy V
And so, you know, yes, in the US, it's, it's life and disability. It's all the same critical illness, you know, accident, hospital indemnity, like the entire voluntary suite of products that are offered here. And then leave management and I did want to talk about that a little bit. So, in 2012, Leo started to think, again, you know, the visionary that he is, what's the next thing that our, that our software could could solve for what problems are companies have thing that we could help solve for. And, you know, the Family Medical Leave Act had been enacted, you know, years before. And carriers were starting to really struggle with how to manage FML on behalf of their insurance customers and third party administrators as well. And so we decided to get into the leave management business and at the time, it started as FML, family medical leave. And the industry refers to it fondly as absence management. Most insurance companies, they got into that business primarily because they're insured business customers were asking, can you help us manage these leaves under the federal program? And then you know, like ASO STD I don't think most insurance companies love to offer that service but they do it so they can get the you know, the longer tail risk the long term disability in the life and other products. So we hired an excellent In the absence management field, Angie Brown, and she came in and started working with the developers to build our the first version of our absence management solution. And that was in 2012. And we wrote our first customer, you know, shortly thereafter, and that has been just a significantly growing business for us. Because it also is what brought us into into the large corporate market. large employers that didn't want to outsource their leave management to a third party administrator or to an insurance carrier wanted to manage their leaves in house. They didn't have the technology that allowed them to do that.

Nick
Yeah.

Stacy V
And that opened up a new market for us, and it's been a really, really terrific one.

Nick
Could you talk about that specifically, like, when, I'm fascinated when new markets get generated, there are no customers and there are very few use cases where you can actually prove things out. So a lot and I think a lot of the heavy lifting is the sales effort to find potential business, and then walk them through a sales process where it's just like, they don't even know they have a problem or the problem is just emerging. Or, you know, or you have to sell it to them that they have the problem. Can you talk about like the creation of that market and the effort that it took, you know, it's one thing to build software, but if you can't, can't sell it can't find the customers. How did you go about creating that market?

Stacy V
That's a great question. At the time, it was okay, we need to hire somebody that knows the employer space. Right. So we did we hired a sales person to join the company that came from that large employer market having worked for, you know, carriers in the past, and so he knew that the best way to get to the large employers is through their broker consultant on market so he started working his network. And then we started to look at, okay, where do large employers spend their time, you know, what industry groups do they participate in? Let's make sure we're connected to those groups as well. And so it was, you know, literally just like down in the trenches building, building the market. And we knew, we knew that there had to be large enough companies that didn't want to outsource, you know, the business. So we what we don't do is we don't cannibalize right. So we don't go to customers that are large corporates, for example, that are working with insurance companies that are clients of ours. That is not at all what we're all about, right? So but if the large employer says, look, we're bringing this in house or we're already managing it in house, and you would be horrified at the number of large employers that are managing these leaves on Excel, or on some other very rudimentary kind of solution today and I should mention that You know, so it started as family medical leave. But as is common in the US, once there's a federal program, individual states begin to think, well, that's great, but we can do it better. So, so states started to enact their own leave programs, paid family leave programs are paid family and medical programs. So right PFL, PFML. California,

Nick
You're potentially running into 50 plus different variations of of the benefit.

Stacy V
Absolutely. So they still have to meet the federal requirements. And then wherever they have employees and states that have their own PFL or PFML. programs, they have to meet those requirements as well. And I mean, truly leading leading up to this pandemic. I mean, it was it was apparent that every year it was going to be another one or two states. You know, we'll see if that activity slows down at all as a result of COVID-19. But you know, already all of the the large states, the most populous states have their own programs, and and then others are looking at different variations of them. And so, so it's been this evolving issue for particularly the larger employers that have employees across many states. How do they keep up? You know, it's the regulations are changing all the time. And, and then even COVID-19, right, the federal government put in a new program for employers 500 lives and under within two weeks. Yeah. And so, you know, our team had to jump right on to as soon as you know, first of all, as soon as we heard the feds were going to initiate a new program. We had to get in and understand it as soon as it became law. You know, because you they'll make a lot of elect changes as they go. So as soon as it became law, we literally, you know, took it into our product r&d team, we have a compliance expert on that team. You know, she immediately started to evaluate what the regs were all about. We work with a partner company as well, a law firm that, you know, we use to just verify, okay, our understanding our interpretation of the law. And then we went to work like we had to, we had to build a solution for all of our customers across those three segments within two weeks, to make sure that they were ready to go and that they were going to be in compliance and make sure their client their clients. Were in compliance with the regs that changed like that.

Nick
Yeah. The classic case, right of probably when the law first comes out seems easy enough to manage it on a spreadsheet. But it becomes unwieldy after a while and it, it, it it's basically divorced from your day to day business. So you have to supply all of these resources to this other thing, just to manage something in house that has nothing to do with your business

Stacy V
And train.

Nick
And it's a classic case where it should be outsourced to someone who has expertise so that when something like COVID-19 pops up, their expertise can immediately get all of the wires connected to it, versus the company having to disengage their business operations, to do something that has nothing to do with their business.

Stacy V
Absolutely. And all of that happened, while employees including the human resources, manager, managers or the teams and in HR had to move home and start working remotely. So this was happening all at the same time, you know, for for all of these companies and, and this is a, this is a global issue, let's face it, but you know, in terms of the regulatory changes, and it wasn't just the federal government that came out with, you know, with the new program, several states started to make modifications to their existing programs as well. And so they had to kind of quickly shift gears. If you were in one of the states that made those changes. With again, it was about a two week timeframe from when, when the law was enacted to when it was going to be effective. And so it was a very, it was a very challenging time for businesses for sure. You know, fortunately, as you mentioned, because because we have a process in place, because we've got the technology, the product, it was a very quick shift for us. You know, I was very proud of our team, we, we pulled together you know, everybody's working remotely, which is relatively easy, right for us, a company like ours to be able to do and and then wrap their arms around the regulations, get the development work done, but then it was All communication, how are we going to communicate it to all of our customers, we need to make sure they understand what's happening and what they needed to do to be able to update their their software so that they were ready to go. You know, we had an all customer telephone call a five people on a phone call, you know, we set up a confluence page we use that for, for communicating with, with our customers. They were asking, you know, live questions on it. I mean, you know, we had to leverage every bit of technology we had in our customers hands to be able to get the work done in a very short period of time.

Nick
Yeah, it sounds as though ClaimVantage has the advantage that there was a by necessity and I sort of think this is this should be for any of the Insurtechs that are coming in that you had somewhat of a sales DNA, in your in your company, where and I don't mean sales like actually selling and pitching but the use you said the word "in the trenches", the necessary work to sort of have your finger on the pulse of especially when you're making a new market, having your finger on the pulse of how is this going to help potential customers? How is this going to solve problems? And constantly asking, trying to connect those dots from product development to actual real world solutions? And that's, that's a true sales process that I see missing from a lot of a lot of the Insurtechs that are coming through where, you know, sales is thought of as like, well, that's not the hard part. The hard part is creating the product. But in reality, it's the trenches right? And so can you talk about like, do you feel as though ClaimVantage has sales in his DNA?

Stacy V
Yes, you ask any employee at ClaimVantage, and they will answer. Yes, absolutely. And it starts at the top. Right. So that is that is Leo's mindset. Leo's mindset is, you know, we're here to solve problems. That's why the business exists. That's why the company exists. That's why every employee is here, you know, solving problems for the customers that we have, and taking care of them, and then solving problems for customers that we don't have markets that we don't serve yet, you know, how can we leverage what we built in different ways? And so and that is absolutely a mindset it is. It does start with Leo, it is all about, you know, if we're not creating something new, and constantly creating something new and constantly improving it, then we're standing still, I mean, the company was bound was was formed on the basis that he never wanted to have a legacy system. Right. So by moving to the cloud, and by we release on the Salesforce release schedule. So three times a year, we're putting new updates in the solution. And so three times a year our customers are getting the latest and greatest that our team is putting together and bringing to the product. And so that is what's going to keep our customers ahead of the curve, you know, not behind the curve and not years behind the curve, but not making sure that we're never legacy is absolutely core to, to our product r&d efforts.

Nick
Yeah. Can you actually talk a little bit about the technology and the implementation how you would engage with a particular customer, we're specifically interested with the Salesforce backbone of what it is you're doing what if you have a customer that's like, Oh, well, we used to have Salesforce but we don't anymore. You're going to make me go back to that. How is the engagement and how do you implement the software for customers that may have some may have an alternative to Salesforce that they're currently using?

Stacy V
That's a great question. So you need to separate out Salesforce CRM or the other solutions, you know, Service Cloud, you know, Marketing Cloud, separate those Sales Cloud those things from the platform. Right? So we're built on the platform and native to the platform. It certainly is easier if we're talking to a company that already has Salesforce in their environment in some way. Whether they're using it for CRM, or for case management, some other capability that Salesforce brings to the table. It's easier because Okay, they already see the value they already have a relationship with Salesforce. And so we're you know, we can come in and say this is another Salesforce product. If you think about the different products you have, this is another one in order to in order to run our solution, they need to have Salesforce licenses. So that that is key. But if they're a customer that may not have ever used Salesforce before, and of course many of our corporate accounts haven't. They may have heard of it. Salesforce is the largest, you know, cloud technology company in the industry. But if they haven't been, we very much describe Salesforce and all the advantages that Salesforce brings to us and to them as customers right up front, so we you know, it is part of our sales pitch. You know, it is unrivaled security, it is absolutely about scalability, its functionality, right. Our products are highly configurable, because they're built on the platform, which is a highly configurable platform. And so, so we sell those advantages upfront. But if a customer has said, Oh, we've you know, we've moved from Salesforce CRM to Microsoft Dynamics, so what do you mean we need to You know, get back involved with Salesforce, it's very easy. Well, you have to have Salesforce licenses to run our technology. So yes, you will need to have a relationship and a contract with Salesforce. But it's, it's for the platform use.

Nick
You don't have to you don't have to you don't have to re engage with the CRM. Oh, element of it. Yeah,

Stacy V
that's right. That's right. So, you know, I think as more companies build software on the platform, it'll be easier to explain that, you know, you can have a relationship directly with Salesforce for all of the great things that they sell as products directly to end users. But then the platform is the opportunity to leverage that great technology that's been built and all the advantages that come with it, to to build product on top of it.

Nick
Yeah. And we're seeing it on the P&C side, too. So we have had, we have interviewed a couple of SaaS companies that deal with policy management systems. They're built on top of Salesforce. And so it's very useful. I want to make sure the audience understands very useful to know that you don't necessarily have to get the full blown Salesforce license to take advantage of this. You just have to get a license that's kind of linked with that. It is a it is amazing, though, when I was investigating property casualty policy management systems like the the app, basically, it's like an app store. App exchange, yes. for Salesforce and how, how many companies are built on have built on that similar to you know, what you can find if you go to an Apple App Store? Probably not as many because these are more sophisticated corporate solutions and not just games and stuff, but it's it's a it's amazing how robust that is. I guess if you get that good, you can build a skyscraper in San Francisco.

Stacy V
Yeah, it's uh, well, the New York City location is pretty awesome too for Salesforce, I've been there I haven't been to San Francisco yet, but to their office there, but yeah, it's, it's pretty cool, right? So the, the app exchange is a great place to go and find various technology companies and capabilities that are there. You know, when I, when I think about what Salesforce has done, and I, I was a Salesforce CRM user, you know, for 20 years before joining the company, and I didn't even have a, you know, a great understanding of the platform capabilities when I joined claim Vantage a year and a half ago. So I've learned a lot along the way. And I work with the Salesforce account management team for our account, you know, I work with them pretty much every every week. So I continue to learn as I go. The app exchange is a place where, you know, you can go and look for, you know, various solutions. So, you need a document management system and you get on the app exchange and you see well DocuSign you know, is there or The two companies that Salesforce has acquired in recent years Mulesoft and Tableau are both solutions that many insurance companies use. Right, really. So for integrations and for, for reporting.

Nick
I think a lot of folks that will listen to this probably know, Tableau that's, that's very endemic in the insurance industry as a BI, business intelligence tool, reporting tool. So I actually didn't know that they had been acquired by Salesforce.

Stacy V
Yes, yes, they have. And, and then, as a result of acquiring a number of data analytics companies, they've put together what they refer to as Einstein, right. So the data analytics, you know, predictive modeling, kind of all that wonderful data science work that's inside of the Einstein toolset, that's again, inherent inside of Salesforce. So that ecosystem and that's how they refer to it that ecosystem just continues to get more robust and and more helpful and useful to their customers over time.

Nick
Yeah, I don't think we should understate that because what essentially what you're saying is that folks that are potentially working with claim Vantage on a sales for force platform have two options to continuously improve their process improvement in claims. One is, as ClaimVantage continues to improve the software, they'll continue to get more benefits, but then they can plug and play with other pieces of the App Store since they're already on Salesforce. So they can plug into tableau, they can plug into some of these other tools and keep advancing the the analytics they can. Or my favorite turn now they can keep money balling their their business, you know and and really Getting getting quality economics out of it.

Stacy V
That's right. No, that's exactly true. Right so and Salesforce invests, you know, billions of dollars, as witnessed by these acquisitions right in, in making the company, again, more, more user friendly, but also more broad reaching in terms of the capabilities. So they also have organized Salesforce is organized by you know, by vertical, and the insurance vertical sits within, you know, within their financial services sector. It's their fastest growing sector, you know, and we're really proud to say that we're one of the leading ISVs within the Salesforce environment, you know, in the top three, for for financial services, so, they, they appreciate the relationship they have with us, they have what they call a partner program, they treat their their, you know, native companies. Companies inside of their ecosystems ISV partners like us, you know, really well, they they want our feedback. They're constantly looking for, you know, how are we doing? What problems do your customers have? How can we help you solve those problems? So there there really is a true partnership in the relationship we have

Nick
any plans to? Also I'm selfish. Yeah, I do Property/Casualty. And he plans to move into P&C.

Unknown Speaker
So I'm going to say we would never say never. But one of the things that I think Leo always wanted to make sure we did was maintain this deep industry expertise, right. And so for that reason, we've been a niche player in this space like we haven't, we haven't moved into policy admin, right. I mean, some of our competitors have policy on and systems and but we stayed with a claim and leave management which lead management was a natural extension right of managing disability claims for our customers. So same is true with with PNC, we get asked that a lot. We've looked at some workers comp opportunities, particularly you know, in Australia, for example, and the disability component comp claim, of course, is disability claims. So it seems very logical, but the health component is quite different. So, you know, I, I say we have a lot of runway left in the markets that we serve with the products that we have to not kind of venture into the P&C waters. But you know, I'll never say never, you know, because if we decide that we can make a good charge there and we believe that our products are you know, would be highly valued, then we consider that

Nick
thank you for taking time out of your morning to educate us. I always like learning. For anyone that's listening as usual stay safe. Don't forget to subscribe being behind and all of Stacy's contact information herself, ClaimVantage, and any appropriate links & the transcript to the show will all be on the show notes so you don't have to pull over to connect with her on LinkedIn. I will share that link with her. Stacy, thank you again so much.

Stacy V
Thank you, Nick. Have a great day.

Nick
You too,

Stacy V
Be well