Alex Frommeyer is the CEO of Beam Dental, a digital-first provider of dental benefits that focuses on ease-of-use and tailored pricing that is fundamentally built on preventive care.Alex was interviewed by Andrew Daniels, Founder and Managing Director at InsurTech Ohio and COO at LISA Insurtech in collaboration with The Future of Insurance Newsletter.
Alex, conversations about insurtech are often focused on changes to Property & Casualty insurance, but how is the group benefits space equally evolving?
“I think Beam is a fantastic example of evolution within the group benefits space. We’ve built the industry's first and only digitally-native, dental insurance company. We operate in the group benefits space, so an employer of any size will purchase multiple employee benefits products and provide them to the employees of the business. They tend to do this through an employee benefits broker who has the expertise to help a business shop for and select the right benefits plan for that employer's goals and budget. Brokers help navigate the complexities of health insurance in particular but also dental insurance and other lines of coverage. Group benefits has gone largely untouched for decades until very recently.
Health insurance is the most important coverage line for employers due to its complexity and cost, but dental insurance is the second most popular employee benefit. It's a great mechanism for attraction and retention of talent, especially in today's tight labor market. When Beam entered the market, we wanted to take a completely different approach from the incumbents that are already operating in the dental insurance market.”
Talk us through what it means to take a completely different approach within the context of dental insurance?
“From Beam’s perspective, the first is our digital infrastructure, which is a theme we see iterated across all of insurtech. It includes legacy infrastructure, siloed databases, a customer experience that's disjointed and based on human interaction or having to pick up a phone and make a call to get information. All of those blind spot elements of the customer journey are opportunities for a digitally native company like Beam. Carriers have to do a lot of administrative tasks to help their clients renew each year, so we went through and created the connective tissue so that no matter who the stakeholder is in question, it feels like a unified experience that's simplified and easy to use. This is brand new DNA for the group benefits sector. It's the first time that any company has said we're a technology business that just happens to be operating in group benefits.
The second core element is our approach to underwriting risk, which is not well understood in dental insurance. Most other carriers combine a bunch of groups into a large risk pool and price the pool to make sure it’s profitable on an aggregate basis. They do this because it's very difficult to predict who is going to go to the dentist and what work will happen. Beam wanted to take the opposite approach. We think of this as a bottoms-up approach to underwriting risk. We built our own underwriting models from scratch, and those leverage machine learning to quickly iterate through the empirical claims data that we receive every time somebody does go to the dentist.
We better predict who is likely to go to the dentist, how often and the type of care delivered; therefore, the type of claims that are likely to be thrown off by those events. That's put us in a position now that we're five or six years into providing insurance in 43 states around the US to have very mature models in most of these markets, which allows us to predict what risk is likely to look like given different rates of growth and different types of customer profiles.
The third element that we focus on in our value proposition is our dental wellness program, which is the industry's first and only of its kind. Wellness may be a familiar concept because it’s a very typical addition to a health insurance plan; large health carriers often have their own bespoke wellness programs, and there are wellness companies like Vitality as well. The idea is to reward people for exercising and having good preventative care habits. If you go to the gym, eat healthy foods, exercise regularly, sleep well and consistently, you'll get points, which then can turn into rewards over time. Beam took that concept and brought it into our dental insurance experience!
Beam has taken basic oral care education, which is the value of dental hygiene on a daily basis, and turned it into a program that rewards you for great preventative care habits. We do this through the Beam Brush, which is a connected electric toothbrush that we offer to our members when they enroll in Beam’s dental plan. It's a voluntary program, so not everybody participates in it, but those who do participate earn points for brushing their teeth every day. Points can then be redeemed for prizes, which gives our members a real reinforcement for not only why they would build and maintain good dental care habits but a reason to use the Beam Brush and participate in the Beam ecosystem.
Those three elements have given Beam not only incredible differentiation in the market but have informed our ability to grow quickly.”
What are some major employee benefit trends you're seeing this year?
“The pandemic has had an irrevocable impact on the future of benefits. Investment into insurtech is skyrocketing, employee behavior is changing, and what they want from their employers has shifted too. All of those changes have informed the three trends that we’re looking at for 2022.
The first is the rise of ancillary coverages that especially contribute to a sense of holistic health. What I mean when I say holistic health is that you have health insurance, but health insurance has a problem: it's extremely expensive. The costs are growing quickly, and it still doesn't cover everything. We're seeing employers, especially in this tight labor market, trying to solve for a comprehensive approach to health and covering the entire body. There are a few ways to do this. One is adding coverage for a very specific element of healthcare like vision insurance. There are also benefits that surround your health insurance product like supplemental health: accident coverage, critical illness and hospital indemnity, and we are seeing a lot of growth in that market, especially for smaller employers.
I mentioned health wellness programs earlier. That's another great example, so employers can thoughtfully construct multiple coverages that cover the entire body in a comprehensive way. You can add in some other benefits like fertility coverage and disability coverage, which often is paired with paternity and maternity leave as well.
The second piece of the puzzle is digitization. This is already a major piece of Beam's value proposition and has been for years, but the pandemic has made digital infrastructure a ‘need to have’. The brokers and small businesses we work with always loved that Beam has automation, scalability and a digital-first approach, but now they've realized that their workflows depend on having carrier partners who can operate successfully in a remote environment. We see carriers and brokers prioritizing the role that digital first can play in their business when it comes to all of their HR stack, certainly including benefits.
Finally, the third trend is a switch to person-centric benefits rather than office-centric benefits. This is another dynamic driven by COVID 19. Since the vast majority of work was done in person, employers were building a lot of their perks and benefits programs working backwards from an office environment. This isn't irrelevant today because there's still plenty of offices being used or used part-time in a hybrid environment, but the subtle but important switch is happening.”
Beam has been a fast growing employer itself in Ohio in recent years. What's next in 2022?
“We have a lot tee’d up for 2022 that we're really excited about. One is continuing to grow our team in Columbus. We have more remote roles than we did prior to the pandemic, but the vast majority of our team is still in Central Ohio. Roles we're particularly excited about adding to the team include our customer support, account management, engineering and product management teams. We're also excited about continuing to grow our footprint as a local employer that's making noise on a national scale.
Beam is always looking for ways to be a great corporate citizen. That means participating in more of the things that are helping Columbus grow and succeed as an ecosystem. This might be very startup or tech ecosystem centric, but often it's other areas like the arts, economic development or local inclusivity initiatives.”