TORONTO (Reuters) - Canadian health benefit startup League Inc said on Wednesday it has teamed up with the insurance arm of backer Royal Bank of Canada as it expands into insurance, targeting the many small businesses offering no such benefits to employees.
The company received a license on Friday to operate as an insurance broker in Ontario and expects to obtain similar licenses across Canada in the next four to six weeks, Chief Executive Mike Serbinis said. It plans to expand its insurance offering to some U.S. states within three to six months.
League's move presents a challenge to larger insurers who typically offer more rigid plans that are better suited to large organizations.
The Toronto-based company currently sells software that helps employers manage employee healthcare and lifestyle benefits for their workers.
League's life, accidental death, critical illness and other insurance plans will be underwritten by RBC Insurance at launch, with additional underwriters expected to join.
Serbinis said 70 percent of U.S. companies with fewer than 50 employees do not offer any health benefits, with a similar percentage for Canadian companies with fewer than 100 workers.
"It's a huge market," he said, adding that League expects to collect $1 billion in premiums or equivalent by the end of 2018.
The company has 50 employees, and expects to double that by the end of the year. It had 25 employees in June, when it raised $25 million, with RBC among the investors.
Reporting by Alastair Sharp; editing by Diane Craft