Investment Needed for Medical Insurance Claims Processing Business

We need funding to buy start-up equipment, establish a call centre and pay for mobile application development. Our planned start date is 3rd March 2014.

We intend to be a premium software provider in the field of Management and Processing of short term insurance and medical claims.

Company Introduction:

CPE is a short term and medical insurance claims processing company, based in South Africa. The pilot project is based in Johannesburg, and will later establish offices in Cape Town. It processes claims using a specifically designed and developed mobile application called “Claims Expeditor”. Claims Expeditor will reduce the processing time. CPE takes the risk away from insurer and medical provider. CPE is a solution to excess paper used in this industry and to excess costs incurred by providers of short term insurance and medical services/aid.-

Services:
CPE offers a comprehensive list of services that supports short term and medical insurers.

We intend to offer the following services through technological platforms under development designed to increase the efficiency of all the processes involved in handling a claim. Due to tougher competition posed on insurers by existing and new entrants to the industry, there is a need to streamline their processes by way of outsourcing. CPE will use an integrated web application to handle the claims function, hence providing cost efficiency.

There will be two main lines of business:
• Short Term Insurance Claims Processing
• Medical Insurance/Aid Claims Processing

Target market:

Insurance companies, medical aid companies, corporates, doctors, etc.

Оuр goal is to be ahead of our competitors in technological developments that create the efficiencies in claims processing and in turn, the profits for its clients. The ability to rapidly infuse money into the company will ensure that its competitors remain in a posture of emulation. It is our technological advantage, combined with the vast amount of unharnessed market potential that makes it such a phenomenal investment opportunity.

In addition, smaller insurance companies will find it impossible to operate profitably without outsourcing collision claims because such companies will not be able to achieve the lower costs that are associated with high volume transactions. Another key attraction of our business is that it will offer full-spectrum claims processing services, with rapid transaction clearance in the marketplace.

The business concept has proven to be feasible, according to statistics of both policies and claims submitted to the South African Insurance Association (SAIA). The research went on to determine the number of claims submitted per annum by five Insurance companies picked from the market which indicated that Motor claims constitute 70%, House Owners and Holders, 20% and Personal All Risk , 10% of Short Term Insurance Claims.

According to a report released by SAIA in its annual review of 2011, one of its key objectives is to bring about stability in the Insurance industry mainly around diligence in Claims handling. This indicates that Insurers are struggling to maintain reputation when it comes to processing claims due to high policy volumes submitted annually. One such company, Outsurance handles on average 60 000 policies and 10 000 claims a month spread across Motor and Personal line. This high volume affects proper handling of a claim which in turn opens up opportunities for fraudulent claims. In 2010 alone, at least 15% of claims paid were potentially fraudulent.

CPE will utilize the services of data analytics providers (Trans union, XDS etc.) to authenticate claims as they come through so as to mitigate the risk of fraud and improve on prudence around claims processing.

The company will rapidly build a network of body shop facilities which will receive geographic territories in exchange for agreeing to maintain very stringent quality control standards, certifications, and discount pricing, which further enhance the insurance company's profit margin. Key proprietary software and CPE's planned multi-platform reporting capability promise to make CPE a formidable leader in generic services.

With the new investment, Claims Processing Excellence should be able to achieve (sturdy) sales for the 12-month period of Year 1. In two to three years sales should soar, with (sky-high) pre-tax profits.

For more details, see the attached business plan.

We have assumed an interest rate of 15% over 60 months to pay up the loan amount we will get from investors.

Please refer to the table provided in the Business Plan for projection of the repayments that will be needed.