Tech group Smart Employee Benefits Inc (CVE:SEB) saw shares surge over 12% in Monday as the group continues to go from strength to strength - its Insurtech group will launch its digital voluntary benefits ecosystem next month (August).
The launch will initially be in Canada and for three insurance products in partnership with the insurers who created them.
The Ecosystem will first be made available to SEB Administrative Services Inc's existing benefits administration clients representing over 330,000 plan members and over C$1bn of group benefit premiums, the company said.
"In 2017, SEB generated over $20.0mln of revenue in supplying IT solutions and services to Insurers in Canada and the U.S. through its Insurtech Group," noted John McKimm, the president and chief executive of SEB.
"We have extensive expertise in understanding and implementing processing solutions to Insurer environments."
He noted: "This "Voluntary Benefits Ecosystem" being launched in SEB's benefits division and supported within SEB's Insurtech Group, has been in development for almost two years and is the first of several "Insurtech" market-ready solutions already developed by SEB, which will be launched in the next 6 to 12 months (initially through SEB's Benefits Division).
"All SEB "Insurtech" solutions have global application. All solutions drive annuity revenue models and are delivered on a SaaS business model."
McKimm added that SEB was also discussions today with multiple insurers to launch multiple "voluntary benefits" by the end of fiscal 2019, in Canada, the USA, and globally.
Meanwhile, Mohamad El Chayah, the president of SEB Administrative Services Inc, added: "Voluntary Benefits are a huge growth opportunity for SEB. In a Beta launch of one Voluntary Insurance Benefit solution in early 2018, SEB Admin had over 39% penetration in the first enrolment.
"Anecdotal reports in the U.S.A. suggest employee's uptake of optional Voluntary Benefits has been less than 10%, while participation sales using an active enrolment model (like the SEB Ecosystem) can increase enrolment to 30% or more."
El Chayah went on: "The premiums for the voluntary insurance benefit launched in the early 2018 Beta were typically in the $100 to $200 per annum range.
"SEB's revenue model is administration/commission and driven off premium."
He noted that the voluntary benefits market was fairly underdeveloped in Canada, with some saying say less than 5%, largely because of the cumbersome application and approval processes.
"SEB's digital Ecosystem allows a plan member to buy a guaranteed issue insurance solution in minutes, not days and weeks.
"In the U.S.A. and other markets, voluntary benefits have been available for more than 15 years and are growing in popularity," he added.
SEB shares added 12.12% to stand at C$0.185.