Venture-backed BenefitVault wants to be PayPal for the insurance industry - Technical.ly Philly

Growth

Jun. 16, 2015 12:29 pm

Venture-backed BenefitVault wants to be PayPal for the insurance industry

The Old City startup is run by industry vet Cary Toner, who founded insurance software firm iPipeline.
Inside BenefitVault’s office in the Bourse.

Inside BenefitVault's office in the Bourse.

(Courtesy photo)

After building and selling what was said to be the country’s largest life insurance agency and then founding a insurance software giant, here’s Cary Toner’s next move: building a PayPal for the insurance industry.

Toner, 58, of Malvern, is the chairman and CEO of BenefitVault, a venture-backed Old City startup that aims to make it easier for companies, unions and organizations to administer benefits to their employees and members.

Founded in 2013 by Josh Spivak and Eric Raymond, it’s a workaround to the payroll deduction that employers generally make to pay for benefits. Payroll deduction, said sales staffer Andrew Bezden, is a time-consuming and error-prone process. Instead, BenefitVault creates a bank account for each employee and handles insurance bills for employers that way.

A brief primer on Toner’s insurance industry cred:

  • He founded Center City insurance software firm iPipeline, which he sold to New Spring Capital and Volition Capital in 2008, though he remains a shareholder. A spokesman called iPipeline “the largest life and annuities platform in North America” after it acquired a competitor in 2013.
  • Before that, Toner ran life insurance agency the Toner Organization, which went on to merge with another insurance firm and later sold to Citi for $1.47 billion.
  • Toner replaced cofounder Raymond as BenefitVault chairman and CEO last fall.

Toner’s son, Ryan Toner, 32, is president of BenefitVault.

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Andrew Bezden of BenefitVault. (Courtesy photo)

The company has raised $3.8 million to date in venture capital from undisclosed investors, Bezden said. It currently employs 20, out of a 3,000-square-foot office in the basement of the Bourse, though BenefitVault says it plans to move to an 8,000-square-foot space on the the 28th floor of 1700 Market Street, neighboring iPipeline’s 1818 Market Street office. The company has plans to double in size by the end of the year.

Watch the startup’s marketing video below.

The company has a unique sales strategy: they don’t sell directly to their customers. Instead, sales staff spends their days cold calling insurance agents who can use BenefitVault as a way to close on their own sales. That’s because companies and associations sometimes don’t want to deal with the hassle of payroll deduction, Bezden said.

“Sometimes it’s the only way they can get in the door,” Bezden said, speaking about insurance agents.

Insurance agents don’t make any commission from BenefitVault, though BenefitVault is developing incentive programs to reward top-selling agents. The company takes $5 per month from each employee that uses the service.

BenefitVault_OfficeAction_June2015_12

(Courtesy photo)

BenefitVault declined to disclose its annual revenue.

Philly has quite a few tech companies focused on the insurance industry, like Adminovate, Leadnomics and Abaris.

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Companies: BenefitVault, iPipeline
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