App-based travel insurance startup Faye announced $8 million in seed funding after coming out of stealth mode last month.
Faye offers a range of insurance products, including trip cancellation, medical coverage, trip delay and trip interruption. Clients can keep track of their travel insurance and get real-time alerts via Faye's app and can file claims digitally, which, when approved, can be paid to Faye Wallet, similar to Apple Pay and Google Pay.
Faye said the payments card enables travelers to be reimbursed quickly in order to use the funds during their travels, instead of paying out-of-pocket for inconveniences like delayed bags or flights and being reimbursed later.
The company is building a portal for travel advisors, which is expected to be ready this month, CEO Elad Schaffer said. Right now, advisors' clients can be enrolled via a link, which advisors can then use to track their commission.
In a statement, Schaffer said Faye was designed to solve some of travel insurance's traditional hiccups, like the claims process, which has historically been slow.
The team behind Faye consists of former employees of insurance providers like Allianz and Lemonade. Its advisory board includes Mike Nelson, the former Allianz CEO of global travel insurance; Rick Ensign, former vice president of sales of AIG Travel Guard; and Raija Itzchaki, the former president of Generali Travel Insurance.
Nelson, currently the CEO of Arrivia (No. 18 on Travel Weekly's 2021 Power List), said Faye's digital experience caught his attention.
"I've always been interested in … starting with a more digital offering, whether it's reimbursement into a wallet or the claims process and stuff like that," he said. "Yes, you could try and find the time to build that within a big insurance company, but relative to everything else you're doing, it just gets crowded out."
He said Faye could be a disruptor in the travel insurance industry but did add that "it's a big market. I don't think that Faye is going to be going after some of the core market of Allianz anytime soon.
"It's a different part of the market," he added. "It's a huge opportunity, whether it's direct to consumers, or whether it's with some of the retail trade, where they're looking for more of a personal touch, a stronger digital experience."
While Faye did not detail its commission structure, AJ Steele, head of business development, said commissions "are aligned with the industry standard." Compensation increases if advisors bring back repeat customers.
Schaffer said the company was "selective" with the partners it works with.
Steele, who handles advisor partnerships for Faye, said the ideal advisor partners are those who "care more about the customer and less about the sale," as well as "prioritize good service and relationship building."
"We also want to stress that they need to see the value in our digital-first product: real-time flight alerts and digital processes (like claims filing and reimbursements via the Faye app)," Steele added. "Those who offer customers timely, friendly, compassionate service are welcomed into the Faye fold."