A change in the health insurance law for big employers is giving Santa Ana-based SureCo Inc. a leg up in the industry, according to co-founder and Chief Executive Matt Kim.
SureCo last year introduced a software platform, dubbed Enrollme, where employees at large companies can pick their own plan from a wide variety of carriers.
“You can have 500 employees on 500 different plans,” Kim told the Business Journal. “We can custom tailor that plan for an employee.
“It’s a completely seismic shift in how employee benefits work today.”
SureCo now has an annual revenue run rate of $30 million; it has 130 employees with plans to hire another 30 in the coming months.
While it’s an insurance broker, it declined to participate on the Business Journal’s list this week (see list, page 24), because it wants to be considered a partner rather than a competitor to those companies, providing back-end support for other agents.
“Technically, we’re still a fully licensed insurance broker, but really the vision and strategy are for the company to be a platform that enables personalized healthcare that we’re delivering today,” Kim said.
Insurance Career
Kim was born and raised in Las Vegas where his parents were casino workers. He eventually made his way to Orange Coast Community College with the idea of entering UCLA.
However, the lack of money led to a full-time job instead of school.
“At that point in time, I had no money,” Kim said. “I even got evicted out of my apartment.
I was living out of my car. I had too much pride to go back home.”
In 2006, he saw a lot of friends making money in the mortgage industry but “it didn’t smell right.” Thus, he started working at HealthMarkets Inc., which is among the nation’s largest healthcare brokerages with 3,000 to 4,000 agents.
He began by setting up appointments before eventually working his way up to a broker himself, making numerous cold calls and driving up to 40,000 miles annually to visit clients in Southern California.
“I learned about the inefficiencies; I could see the problems” such as the ever-increasing cost of healthcare and the problems faced by small business owners getting insurance, Kim said.
He became so successful that his team of brokers made the company’s list of the top 10 teams at the company.
Kim and another agent, Matt Christopherson, in 2009 decided to form their own brokerage, Bayside Insurance Associates.
“I found out I didn’t know business,” Kim said. “We were too cheap to buy a second phone so we’d share a phone line. So, one of us would make a phone call and then pass the phone to the other person so he could make calls.”
Following the passage of the Affordable Care Act, “everything started melting” in the industry, he recalled.
“We went from 20% commissions to 2% commissions,” Kim said.
2016 Start
In 2016, Kim and Christopherson began SureCo along with Marc Bablot. The latter two are now chief revenue officer and chief administrative officer, respectively.
They found their initial business model “couldn’t efficiently grow the business” so they changed from targeting small independent contractors to large corporations with more than 500 employees.
“The business has gone through a complete shift,” Kim said. “We’ve restructured the company to move away from the direct-to-consumer market to the enterprise B2B market. It’s a big shift.”
They also invested more to build their online platform by hiring Amir Pirnia, who among other prior technology jobs was a senior director of technology at Legalzoom.com, where he played a critical role in building that company’s back-end infrastructure.
Enrollme
Last year, the company unveiled Enrollme, where it says employees can explore healthcare plans that fit their individual needs.
Kim said the platform can feature 300 to 400 different carriers, each with 20 to 30 health plans.
“Those are all available on our platform,” Kim said. “What we’re doing today is opening a platform where employees have choice and can pick what will be best for them.”
Among its large carriers are Kaiser Permanente, Anthem, Blue Cross/Blue Shield, UnitedHealth Group and Cigna.
SureCo now has about 20 clients spread around the nation, each with an average employee count around 500.
It touts the plan as a solution for companies that have employees who work out of their homes in different states, which they point out makes it difficult for human resources departments to find adequate insurance.
SureCo has automated the process so that it will handle items like billings.
It also sells the platform to large customers by telling them they can reduce costs by 40% by spreading the risks around to different carriers. Kim noted that in health insurance, about 4% of the population incurs 90% of the cost, he said.
“We lobby for these employers to get away from their own risk,” he said. “We’re moving that risk to the full market.
“Everyone understands auto insurance. If you get into a car crash and it’s your fault, then the cost of your auto insurance will go up.”
Other brokers can offer similar platforms, but their systems “haven’t yet caught up” to the new way of doing business, Kim said.
Kim plans to stay in Orange County, saying he “loves” the area.
SureCo is “fully bootstrapped. Not a single dollar of debt.”
He might consider an initial public offering.
While private equity firms have inquired, he said, “We’re not for sale. We have a lot of work to do. There’s a lot of opportunity.”
