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Calgary’s Next Economy: Calefy driving digital innovation in commercial insurance

The commercial insurance industry in Canada is literally 15 years behind the rest of the world, according to Calefy president, Simon Hlywa.

“The vast majority of business insurance is still sold the old-fashioned way,” he said.

“When I say the old-fashioned way, I literally mean like, paper and pen.”

The Calgary-based operation, led by Hlywa, Kevin Lea, Kate Jackson, Philip Obiora and Eric Campbell, wants to bring the commercial side of Canada’s insurance business into the 21st… Century (errr… Late 20th Century).

Hlywa said most people looking for this type of insurance contact a broker, talk about insurance, get paperwork sent via email PDF, they might fill it out digitally or might print it out and do it by hand and then send it back.

Then insurance companies take that information, re-enter it into their system and email back a decision. With all that data entry, there are often errors made.

“That’s the current process and it’s super old and silly and then slow,” he said.

Most people are used to the notion of being able to get personal or car insurance by opening an app and punching in answers to a few questions. The commercial side hasn’t advanced to that yet.

The reasons for that, Hlywa said, are that personal (house, car, travel) insurance is a pretty narrow band of options. Commercial policies can be more complex.  Also, the personal insurance side is nearly double the value of commercial. Insurance companies have put an emphasis on digitizing the personal side.

A software company – not insurance

Kevin Lea, the company’s Chief Insurance Officer, UCalgary grad, long-time commercial claims adjuster and broker, and board member for the Insurance Brokers Association of Alberta, said they wanted to digitize this process.

“We’re not an insurance company. We’re not an insurance brokerage,” he said.

“What we do is we build software to make that transaction a lot easier.”

He said the Calefy software ingests all the client data upfront. That data is then pulled into the broker systems. Then it’s matched with other data that might matter: Flood, wildfire, earthquake, fire coverage, etc. to develop policies.

“We’re building software to hopefully drive the revolution in the commercial insurance space so that we can actually use computers to do insurance, as opposed to paper,” he said.

It’s not their first insurance foray together, either. Hlywa and Lea formed Calgary-based Fuse Insurance in 2017. They were among the first to launch a digital commercial insurance brokerage in Canada.  

They wanted to digitize the entire process so the client had a better buying experience. Lea said they realized that they’d need to build the platform from the ground up. They spun off the tech side into this company: Calefy.

Defining key objectives

Hlywa said working with the Alberta Catalyzer – Velocity program has helped them narrow in on their key objectives.

“It’s been incredibly helpful to make sure that our focus is on exactly what we need it to be,” said Hlywa.

Jackson, Calefy’s Chief Marketing Officer, said the value is in prodding you along to tackle the organizational things that are necessary to move the company forward.

“It just kind of holds you accountable and like forces you to move along faster than maybe you would if you’re just doing the day-to-day running of your company,” she said.

Lea said they jokingly refer to the Velocity program as “entrepreneur school” – a crash course with dozens of professors that drive them toward the core of their business.

The key to the future is in breaking through with digitization of the commercial side of the business. That’s critical for company growth, Hlywa said. It’s an insurance industry and regulatory barrier that must be solved.

“I think that once we are over that, or, as soon as we are over that barrier, we become, by far, the best solution in the country, I think for aggregating commercial quotes,” he said.

“I think at that point, our growth can accelerate pretty significantly.”