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AGroup, provider of the cloud-based human resource management (HRB) software, is rolling a new product – ‘Benefit Administration System’ that is designed to help Russian companies to provide health insurance to their employees. The cool part of this system is how the costs are distributed between the companies and the insurance. Employers pay 1 Euro per month, whilst insurance company pays a percentage of the contract they sign with that employer. This is a pretty innovative step in this established B2B space. I spoke with AGroup CEO Alexander Snurnitsyn, who told me about AGroup’s past, funding, plans, and more.
AGroup emerged in 2008 from the restructuring of Latvian of the Robertson & Blums Corporation. The company has gained recognition for their HRB tool (developed in 1995) for reporting and calculating payroll, gaining more than 550 clients from 22 countries, who have used the tool to calculate more than 250,000 payrolls. In 2011, AGroup raised a 1,5 million Euro Series A round from BaltCap, and now moves to roll out its system for management of social packages.
Snurnitsyn tells me that the ‘Voluntary Medical Insurance’ market in Russia is valued at approximately 5 billion Euro and that 90% of said insurance is sold to corporate clients, who distribute this to their employees in the form of social programs. Of this, an estimated 80% of funds are insurance, with the remaining 20% coming in the form of life insurance, pension accumulation, sports facilities, etc. As the insurance market in Russia is competitive and fragmented with hundreds of insurance providers, Snurnitsyn argues that it is a chore for compensation and benefits managers to deal with design of the benefit, budgeting, online enrollment, management of eligibility profiles, reporting, document management, tenders for vendor selection, etc. As a result, AGroup has rolled out this nearly free solution that is paid by the insurance companies as a percentage of contract.
The company has already rolled out BENEFACTORY, a free (to employers) service for companies with less than 150 employees. The system offers a centralized place for creating benefit systems, managing eligibility profiles and documents, budgeting, etc. Companies can choose insurance providers from ‘clubs’ listed by AGroup and manage their benefit systems, but choosing from outside the ‘clubs’ of providers will result in paying significantly more for the service. Snurnitsyn tells us that they have signed up their first client and have interest from large insurance companies and employers, pending completion of the first implementation.
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