LEAPFROGGING THE WEST

In her roomy office at Commonwealth Drive, Rosaline Chow and her team of 200 are busy preparing for the company’s next phase of growth. Following a Series A round that raised US$8 million, the team has just received another US$25 million in investments in Series B. Their high-profile investors include Facebook co-founder Eduardo Saverin, B Capital (BCG), EDBI, Philips Healthcare and global life and health reinsurer RGA.

The company, is valued at US$100 million just three years after its launch.

CXA Group, Chow’s third tech start-up, is a digital storefront where employees are given the option to choose their benefits. Unlike conventional models of employee benefits, CXA entirely disrupts the system by offering a radically different proposition. “We deconstruct the money companies spend on employee benefits, and give the employees a wallet to allow them to choose what would benefit them,” Chow explains.

In more conventional insurance systems with one-size-fits-all benefits, there is a lot of duplicate and excessive spend for dual- income families and young employees, with a lot of money wasted in purchasing insurance that employees barely use or simply do not value. “We let employers repurpose their insurance spend on prevention, wellness services and disease management,” Chow says, adding that this is particularly pertinent in Asia where chronic diseases hit 10 years before they even reach the West. As an indication of this phenomenon, she notes that premiums are rising much faster in Asia than in the US or Europe.

When employees become healthier, companies benefit with higher productivity and lower healthcare spend, Chow explains. And CXA makes it much less vexing by taking out all the paper in the system. The model has proven so popular that CXA counts no fewer than 45
Fortune Global 500 companies among its 500 corporate clients, with the figure expected to grow as CXA expands across Asia.

The idea behind CXA came to Chow when she was the head of employee benefits broker Mercer Marsh Benefits’ Asia Pacific region, where she grew the business in 14 Asia Pacific countries with 400 employees by 800 per cent over eight years and made it the dominant broker in Asia. Having identified better ways to improve and grow the business by addressing Asia’s biggest pain points, Chow built business cases to invest in a tech-enabled business model, which Mercer HQ in NYC declined to accept despite her repeated persistence over five years. So she left and started CXA, fully convinced and confident of its potential.

CXA is now integrated with 500 vendors to provide employees a range of wellness programmes such as weight management, diabetes management, smoking cessation, healthy eating, sleep disorder treatment and stress management, etc. “The mission of the company is to help companies shift money spent on insurance from treatment to prevention, so we can enable employees to lead happier, healthier lives,” Koo explains.

Meanwhile, Chow focuses her efforts on taking CXA into new markets, bringing the company’s regional brokerage footprint to 10 countries around Asia. “We just opened in Hong Kong and China, and seven others will soon follow,” she discloses, adding that the platform has already been piloted by several insurers to white-label for their SME clients.
The exponential growth of CXA over the past three years is due to the uniqueness of the business model in the insurance brokerage industry — no other business offers a similar model, and with as much ease and convenience. “We’ve taken an industry that’s been standing still for 50 years and completely changed the rules of the game,” says Chow. “We use big data to help companies and each employee to understand how they can get healthier, and how to personalise not just one’s insurance but also one’s wellness. This also allows companies to project the future trajectory of their employees’ health and costs involved, which in turn helps them to break the cost curve using the same amount of money that they are already spending on insurance.”
According to Chow, the question that every company should ask itself is: Why go back to traditional brokers if all they do is get you the best price, whereas we do that plus give your employees personalised choices, improve their health and lower your costs — all at exactly the same price by appointing CXA as the broker?
As the founder and CEO, Chow’s role also entails overseeing funding with the company’s CFO, working with the team on developing innovative products and services, and speaking at conferences to educate the industry on new ways to do business. Despite having no marketing spend, CXA and Koo are a regular face in the media, having received coverage by publications such as The Business Times, The Straits Times, The EDGE, TODAY, Bloomberg, CNBC, Channel NewsAsia, TechCrunch, Asia Insurance Review, Human Resources Magazine, Forbes and others. It has also won countless awards in the HR, healthcare, as well as insurance industries, further sealing its position as the most notable and fastest growing new health and insurtech start-up in Asia.
To ensure the continued growth and sustainability of the business, Chow says it is crucial to address scalability. “We are now scaling the tech platform and building a share services operation to support the growth of the company in 10 countries. And we need to be sure that everyone’s goals are aligned.” To this end, she is building the CXA Academy to train existing employees and initiate people from outside the industry.

“It’s a one-of-a-kind platform and not yet replicated by anyone else,” she says, further adding that she has since brought in a lot of industry professionals who initially refused to join the start-up when it was small.

When asked what she would have done differently, Chow laughs. “Maybe I would have bought the smallest broker instead of the biggest one! I spent all my savings of $5 million and signed a personal guarantee to borrow another $5 million to bet that this would work out. Because of this, my retired husband returned to the workforce and my daughter had to work for her US college tuition fees. But acquiring Pan Group has helped me a lot and I am glad that I did it. It’s just that it’s exponentially more work when you build a tech start-up and transform a large SME at the same time.”

Although she has her sights on ambitious goals, Chow — who has two previous dot-com start-ups to her credit — has her feet firmly on the ground, and advises budding entrepreneurs to be pragmatic and realistic in their vision. “You have to find a solution to a problem that needs to be solved, for which people would be willing to pay. In my first two start-ups, I thought if I invented something, people would come, but that is simply not true. It has to address a problem that matters.

“With CXA. I am trying to build a Singaporean company that leapfrogs the West to beat the US and European global companies at their games,” Koo concludes. “And we want to build a great firm that will continue to attract the best employees and the largest clients.”