ExtrasJar, a financial services start-up that offers health and pet insurance, has completed a seed round of funding, securing $600,000.
The lead investor, Sydney Angels, is a not-for-profit angel investment membership organisation. Since its establishment in 2008, it has been running processes and events connecting its investing members with promising start-ups.
Adrian Bunter, management committee member at Sydney Angels and executive director at Venture Advisory, said ExtrasJar stood out as one of the best companies he had seen among over 2,000 start-up investment opportunities over the last two years.
“I was very excited to lead the Sydney Angels syndicate, [which] led the investment into ExtrasJar this year. [John Connor] and [Reece Frazier] are fantastic founders, and we are thrilled to be part of ExtrasJar in shaking up the insurance industry. We are expecting big things!”
ExtrasJar focuses on health insurance extras cover, which it believes to be one of the “biggest shams in the industry”.
Connor, a senior insurance manager with more than 20 years of experience in the industry's biggest players, claims that the 12.5 million Australians who take out “extras cover” are being scammed because only $5.6 billion of the $12 billion spent on extras insurance was given back in benefits. Furthermore, he believes private hospital cover can be reduced by up to 40% without impacting the policyholder's benefits.
“My career has [been spent] working as a senior actuary for Australia's biggest banks and insurance companies – so I know how much money is being taken from hardworking Australians – and it's sickening,” he said. “On average, Australians are losing more than half of their health insurance extras. That's approximately $514 each per year and over $10,280 over 20 years.
“Let me paint you a picture. I love running, and so far, my body hasn't needed physio. Yet with my previous health insurance, I have been paying extras cover ‘just in case’ for the past 10 years. If I sustained my first knee injury this year, I could only claim up to $200 on physio. This would cover a measly two sessions thanks to this outdated model that serves the purposes of the insurance company – not the customer. And trust me – a busted knee can't be fixed in just two sessions!”
With ExtrasJar, any unused extras money is rolled over to the next year and accumulates each year until the policyholder needs to spend it on treatments such as dental, physio, or optical.
“It's your money to spend on the treatments you want – not what the health insurance company says you can spend it on. Think of it like a forced savings plan where a nominated amount gets transferred into an account for you to spend on your health when you need it. It's your money – not the insurance company,” ExtrasJar said.