Better Financial Health: Closing the Insurance Coverage Gap to Deliver Financial Security

Interview led by Missy Krasner, Venture Chair @ Redesign Health with Jon Cooper, co-founder and CEO of Overalls -

It’s hard to believe that it's been a year since I joined Redesign Health. After years of leading healthcare initiatives at Amazon, Google, Box and doing traditional venture capital in digital health, it’s rewarding to be on the cusp of company creation at Redesign Heath. As a Venture Chair, I help guide companies from ideation to formation and then to a commercial launch and growth. The most exciting thing about this role is tackling new problems in the industry every time we seed a new company. Recently, I have been digging into the world of insurtech and supplemental benefits.

Today, I am delighted to announce that we are working with veteran insurtech innovators, Jon Cooper (previous Founder & CEO of Life.io) and Emily Johnson (from DayForward, Fabric, Haven, LearnVest) to launch our newest company, Overalls, which is tackling financial security through a fresh approach to insurance benefits. I spoke to Jon, our CEO at Overalls as the team came out of stealth mode this week.

Missy Krasner: Financial wellness has become such a hot topic, especially during COVID. What’s all the buzz about?

Jon Cooper: Before COVID, financial health was already a major concern. The pandemic exacerbated and highlighted just how fragile we are as a society. Most of the U.S. population is just one unforeseen expense away from heavy debt. With over 40% of Americans unable to handle an unexpected expense of $400 (be it a car or home repair, or a visit to the emergency room, etc.), Americans are financially vulnerable. Our mission at Overalls is to help people quickly and affordably build financial resilience against unexpected financial events. (Federal Reserve, 2019)?

Also, employers are taking a different approach to employee retention and employee benefits due to COVID. Two thirds of the workforce prefer to work in a hybrid or fully remote office environment (McKinsey, 2021) and consumers want benefits that reflect the future of work. Whether it’s working from home, the gig economy, or the rise of the Gen-Z worker, it’s undeniable that the way we work right now and into the future will be dramatically different. Employers are gearing up for these changes and rethinking everything from where and how they recruit employees to where people do their work, to the types of benefits they offer.

Our mission at Overalls is to help people quickly and affordably build financial resilience against unexpected financial events.?

Missy Krasner: A lot of companies are tackling financial wellness. Investors are also looking at the crossroads between fintech and health tech companies.? What makes Overalls different?

Jon Cooper: There has been a ton of innovation recently in insurtech with direct-to-consumer plays where consumers buy insurance in online marketplaces, receive immediate quotes and get underwritten in real-time. In fact, according to Willis Towers Watson and CB Insights, over $20b has poured into insurtech startups over the past 3 years. The vast majority of the investments have gone to direct-to-consumer digital distributors. Yet, these insurtech startups have done little to bend the massive protection gap for Americans. Any savings achieved by acquiring customers digitally are quickly lost as more companies compete for limited online shoppers.

Overalls is attacking this problem from a different angle, innovating within the employee channel which is often overlooked.? We are adopting the same strategy that has successfully reshaped the personal investing landscape by developing the first of its kind, all-in-one insurance protection portfolio. Essentially, we are shaking up how life and personal-line products are packaged by bundling policies into an algorithmically optimized portfolio. Think of it like a Betterment retirement account but for optimizing your insurance benefits. Consumers who aren’t experts in insurance and don’t want to spend hours researching the nuances of the industry or put their trust in a commissioned salesperson can use Overalls to get all of their protection needs in one place, through their employer, and perfectly tailored for their life.

We’ve chosen to work with employers, as opposed to brokers or direct-to-consumer, because employers are already offering supplemental benefits, and yet they are often treated as an afterthought by benefit providers, and largely overlooked by other insurtech innovators. There’s a ton of green space to innovate here and provide more financial security to employees.?

Essentially, we are shaking up how life and personal-line products are packaged by bundling policies into an algorithmically optimized portfolio. Think of it like a Betterment retirement account but for optimizing your insurance benefits.

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Missy Krasner: Jon, that sounds great as we all know that enrolling in employee benefits is such a drag and it’s so poorly understood by so many. So why focus on supplemental benefits and not medical? What are supplemental benefits anyways and why should we care?

Jon Cooper: Supplemental products are the voluntary benefits that employers offer during open enrollment, like life and disability insurance. These are important products and provide strong financial protection. Yet, in the traditional open enrollment process, voluntary benefits are overshadowed by medical and retirement benefits. This comes at the expense of a lot of people who would benefit from the protection these products provide, but who do not enroll because of low awareness and understanding.?

When it comes to financial health, the same topics always come up - pay off high interest debt, build a rainy-day fund, and start investing. This is sound advice but it overlooks one really important fact, it takes a lot of time and discipline to achieve these goals, and data shows we’re failing at it. Americans are more financially vulnerable than ever. This is where protection products like supplemental insurance can have a real impact. While consumers may need time to pay off their credit card debt or build a rainy-day fund, they can immediately protect themselves with supplemental insurance products like life, disability, and accident insurance. These affordable products and other protection products like renters and pet insurance are often overlooked by consumers. Yet, adequate protection can help financially strapped consumers weather the storm the next time they are hit with an unexpected expense.

At Overalls, we are focusing on this segment because supplemental insurance companies have historically had very low adoption rates (usually 20% or below in the workplace) (BenefitFocus, 2021) in contrast to medical and retirement benefits that usually reach 70-80% enrollment levels.? There is a huge opportunity to innovate in this segment as most carriers have been offering the same products in the same ways for decades. Now, more so than ever, employers are looking for new ways to help their employees and to retain talent. There are unprecedented levels of turnover, changes in how and where we work, and vulnerabilities exposed by the pandemic. For all these reasons, there is a new sense of urgency to remodel the employee supplemental benefit experience.

Now, more so than ever, employers are looking for new ways to help their employees and to retain talent. There are unprecedented levels of turnover, changes in how and where we work, and vulnerabilities exposed by the pandemic. For all these reasons, there is a new sense of urgency to remodel the employee supplemental benefit experience.

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Missy Krasner: Jon, coming from a wellness company, your last company being Life.io, how do you think about the employee channel with regard to employee engagement and education?

Jon Cooper: It was such a fun and exciting journey building Life.io from our earliest days in my basement to becoming a recognizable insurtech brand. Along the way, I learned a ton about insurance, employee benefits, HR, and I built a network of fantastic people across the insurance industry. But, above all else, I learned about human behavior -- how we can harness behavioral economics and gamification to create high levels of engagement, and educate and nudge people to invest in protecting their financial resilience.

By working with employers, Overalls can help solve the engagement and education problem. Our unique engagement strategy is centered around celebrating life’s positive events and engaging with employees year round, not just during open enrollment. Through better employee engagement, personalization, and education about important supplemental benefit products, we aim to help employees improve their overall financial security and help employers meet their employees’ most pressing needs.?

Through better employee engagement, personalization, and education about important supplemental benefit products, we aim to help employees improve their overall financial security and help employers meet their employees’ most pressing needs.?

Missy Krasner: What kind of team have you assembled to innovate in the employer channel?

Jon: I’ve spent the past 15 years in and around the insurance industry, working with carriers and employers. As a repeat insurtech founder, I have developed a deep appreciation for the complexity and nuance of the industry, and some of the institutional and regulatory inertia that exists in insurance. As such, we’ve built out a team that has a terrific combination of industry expertise balanced with an outsider’s view and a desire to change the status quo. Emily Johnson, my co-founder and our Chief Product Officer, is a fellow insurtech veteran and expert in direct-to-consumer digital insurance having worked at Haven, DayForward, Fabric and LearnVest. We’ve rounded out the team with expertise in human-centered design, technology, partnerships and business development. We also extend our expertise through our strong Board of Advisors which includes iconic fashion CEO and branding expert, Laurie Ann Goldman (previously CEO of Avon and Spanx), insurance experts John Geyer (previously CEO of MetLife Digital Ventures and MetLife Chief Innovation Officer) and Pina Albo (CEO of Hamilton Insurance Group and former Member of the Executive Committee of Munich Re Group), and the incredible support from Redesign Health.?

Missy Krasner: Thanks Jon. This is an exciting new company that I am thrilled to be a part of. To learn more about Overalls, visit www.overalls.ai