For most of us, the quality of our health and insurance benefits is determined by behind-the-scenes transactions between insurance companies, brokers and the HR person down the hall. Watchtower Benefits, a Chicago-based startup, wants to make the employer-sponsored insurance market more efficient. Co-founder Ryan Sachtjen said the process today is entirely manual, requiring brokers to collect data on employee demographics, current policies and how much the insurance company paid out in benefits. The broker sends that data to insurance companies, who use it to put together bids for the upcoming year’s plan. Those bids come as extensive, text-based documents, and the broker manually extracts the most important insights into a spreadsheet to help employers choose the best plan. According to Sachtjen, it’s a time-consuming, error-prone process that often leaves decisionmakers with incomplete information — ultimately landing you with a less-than-perfect plan. “We want to be a recommendation engine that can help brokers give advice to employers,” he said. “We want to help companies understand how their benefits compare to those of other employers they’re competing against for good talent.” The biggest challenge to making it all happen, said Sachtjen, is a lack of data standardization across the industry. “These insurance programs are hyper-customized in how they are built for employer groups,” he said. “That makes it very difficult for consumers to compare offers. Companies even have different terms to explain the same types of coverage within their plans.” To standardize the information, Watchtower uses text extraction software to pull out, translate and compare sections directly. The startup is also developing a strategy for using machine learning to aid in standardization as new insurance companies start using the platform. Right now, Watchtower supports life and disability insurance, but its plan is to move into health, dental, vision and accident insurance as well. Watchtower’s five-person team combines experience from the insurance industry as well as from tech companies like TurboAppeal, Gogo, SpotHero and Retrofit. The company is currently recruiting for an additional engineer, and expects the team to grow over the next year. “The nice thing about our business is that contracts are big enough that we don’t need a ton of new customers to start building revenue,” said Sechtjen. Photo by 1871/Gregory Rothstein. What's your startup's story? Drop us a line or tweet us @BuiltInChicago
Chicago-based start-up Watchtower Benefits has developed a platform that standardises and streamlines the employer-sponsored insurance market. Co-founder Ryan Sachtjen said the current system is "a time-consuming, error-prone process". The Watchtower platform uses text extraction software to extract and translate different sections of insurance programmes, and is working on using machine learning to increase standardisation as the business grows. Currently, the firm offers life and disability insurance, but plans to expand into health, dental, vision and accident insurance.