Taking it to the people: Gefen boss to unlock investor awareness, build market knowledge ahead of valuation
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Gefen is – and has been – disrupting the legacy agent network long-dominant within the insurance and finance sectors. Co-founder and CEO Orni Daniel tells Stockhead, it’s time to take the message to the people, as investor knowledge and financial literacy build on the momentum driving the company’s true value.
According to the latest Gartner’s research, it’s the chief investment officers (CIO) across the insurance industry that are demanding their firms prioritise the rapid advancement of technology to serve and retain customers.
The Gartner’s 2022 CIO and Technology Executive Survey has digital transformation as the number one goal for insurance CIOs, as the sector tries to navigate the intense challenges in a highly-competitive environment.
Gefen has been proving here at home, Artificial intelligence (AI) is also changing how the insurance industry operates and as the technology matures, its use cases appear to be endless.
For insurance brokers and agents who are able to harness and leverage these opportunities, the potential for growth is just massive.
ASX-listed Gefen International (ASX:GFN) has positioned itself at the forefront of this digital revolution in the global insurance (and financial) sector.
Gefen has begun disrupting the traditional model by allowing insurance (as well as financial) agents to digitise and rapidly grow their sales.
Stockhead caught up with Gefen co-founder and CEO, Orni Daniel, to understand how his platform plays a part in this digital transition, and how big the potential market opportunity is.
“When you talk about insurance and finance related products such as a mortgage for a typical family, you’re talking about 60% of a household’s income,” Daniel told Stockhead.
“Gefen provides services for all that, so in terms of nominal value, our platform covers 60% of a household’s expenses.”
As fighting continues in the Ukraine, global financial markets are expected to become more volatile.
The war will have adverse impact on many sectors, but Daniel believes the insurance sector could prevail during these times of uncertainty.
“With the current worldwide crisis, there is an increase of awareness by people who want to protect their assets,” Daniel explained.
“People will even want to know more about sophisticated, tailor-made insurance products,” he said.
Daniel also says the whole world is not only going toward digitisation, but it’s also moving toward personalisation.
Gefen has created a distribution network that provides the very tools every advisor needs to personalise their service to clients, without the clients having to become experts.
To be clear, the platform itself doesn’t replace agents in the sales process, because it understands they are necessary to the process itself.
What Gefen does provide is a highly compliant platform that advisors can leverage – tools such as messaging and sales & marketing which would otherwise not have been available.
“We initiate communication (between the advisors and customers) through automation, such as sending automated campaigns, renewals, or insights,” Daniel said.
“But when there is a response from the customer, we put them in touch with the advisor in a channel the customer prefers – whether it’s a video chat, email, or WhatsApp for example so they can communicate.”
Daniel emphasised that Gefen technology is not about introducing ‘bots’ as a means of communication.
The business is simple and elegant, he says what Gefen does is empower advisors and free them up for what really matters – they don’t have to do laborious and inefficient work – instead they can focus on serving their customers.
“I believe this is one of the main reasons why the insurance sector has been lagging behind other sectors that have digitised. But at the end of the day, there is no replacement for the human touch,” said Daniel.
Gefen is currently undergoing a complete rebranding exercise, which it will announce in March.
Daniel said the rebranding is not just about redesign, but also to simplify what it’s doing.
“Part of our challenge is to disrupt those sectors in a simplified way, and to make sure the retail investor understands and gets excited about our journey in disrupting these industries,” Daniel said.
The company has recently integrated open insurance and open finance to its platform, which would further automate every aspect of its flagship Arena offering.
“So for us, it’s now only a matter of scaling up, how fast we could execute our scale plan by onboarding advisors and regions onto the platform,” said Daniel.
The company has also recently completed a full transition into a transactive business model, which enables it to generate revenues on every transaction conducted within the platform.
“Back in the days, we were charging a fixed price license fees mainly to the carriers. But now, we’ve aligned our revenue model with that of the agent. If the agent doesn’t sell, we don’t get paid,” Daniel explained.
“To be honest, if our platform increases the agents’ dollar transaction amounts, why would we want to get paid by only a fixed price?” said Daniel.
In the calendar year 2021, Gefen smashed it.
Total revenue was US$12.4m (about $17.3 million), up well over 10% compared to the previous corresponding period (pcp).
The total revenue for its flagship Arena platform was over US$9 million in the same period (that’s $12.5 million), which was up 36% compared to the pcp.
However, its share price has tanked around 70% since listing in June last year.
“We on-boarded six large agent networks but their revenues have still not been reflected during 2021. We expect them to be reflected in 2022, so that’s one aspect,” Daniel explained.
But the other bigger aspect affecting the share price, says Daniel, is the headwind caused by the COVID restrictions on international travel.
“We’re a highly technical offshore tech company based in Israel, and since listing we have not met investors at all. But now the borders are open, we intend to come to Australia next month to do a roadshow.”
Daniel believes as the market comes to understand more about the business, the word trickles out to the canny investors.
He looks at Gefen as a pioneer that’s only just begun its journey, and in its wake the disruption of the sector’s untouched niche of financial advisors and insurance agents.
“We’re talking here about tapping an addressable market of more than U$S426 billion a year, which has grown by 29% in the last three years alone,’” he said.
This article was developed in collaboration with Gefen International, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.