Deal focus: CXA flexes health muscles

Rosaline Koo had noticed a disturbing trend. Health insurance premiums at the companies she assisted as the Asia Pacific head of HR consulting firm Mercer were doubling every three to five years, much more quickly than in Western countries, and placing a major burden on compensation plans.

A look at the data showed why: chronic conditions like diabetes and heart disease were hitting the Asian workforce 10 years earlier on average than they did among employees in Western markets. Genetic differences explained part of the problem, but Koo suspected cultural expectations that emphasized work and study rather than recreation played a major role as well.

“People don't grow up with exercise all the time like they do in the West,” says Koo. “They grow up studying, playing musical instruments, and reading. The diet out here also contributes, with white rice, noodles and ghee, as well as the stress at work and with the educational system.”

Whatever the reason, Koo saw the ballooning costs of healthcare as a disaster in the making for Asian employers. But she also recognized an opportunity: a benefits model that could help both companies and employees fight their healthcare battles more efficiently.

Now CXA Group, the start-up she founded, has raised $25 million in Series B funding led by B Capital and Singapore’s Economic Development Board (EDBI), along with Dutch technology giant Philips and Reinsurance Group of America.

Having seen the health plans bought by many of Asia’s prominent companies, Koo knew their shortcomings well. Often employees were forced into one-size-fits-all plans offering coverage that many users, particularly younger workers, didn’t really need. In addition to this, surveys showed that many employees came from dual-income households, meaning plans covering their spouses often went to waste.

In response to these issues, CXA aims to help corporate HR departments reduce costs through flexibility. Workers are given a wallet that they can use to build a plan to their liking, including traditional insurance products tailored to their specific needs as well as gym memberships and other activities that can improve overall health and prevent disease.

CXA’s other focus is on using technology to predict future developments in employees’ health – and make medical issues less of a surprise for insurers – through data collected from wearable health monitors. RGA will contribute to this effort as part of its investment, by providing its own data and giving employees and companies a score based on how they meet health goals.

“If I can build an analytics engine based on that health data, I can predict future health behavior based on the current trajectory of the lifestyle, diseases and claims, and then I can predict pricing for the next three years,” says Koo. “We’ve built an entirely different model from the rest of the world, given the issues in Asia.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• Early-stage
• Technology
• Financials
• Singapore
• Asia
• NSI Ventures
• B Capital
• EDBI
• Venture