Insurtech | Codafication | Daniel Sandaver

Daniel was born in Mackay in Northern Queensland and grew up in Brisbane. Daniel had all the typical dreams of being an astronaut but knew by grade 7 or 8 – when he started studying business and finance in high school – that he wanted to be a business owner and an entrepreneur.

Pursuing his entrepreneurial dream, Daniel has nurtured and built the  globally awarded digital services and software company, Codification. Codafication focuses on making digital communication, such as video, building software and shipping it in minutes and end-to-end project and business management platforms. We were lucky enough to speak to Daniel about his journey and Codafication.

Daniel Sandaver, Managing Director Codafication

What gave you the idea for Codafication? How did Codafication start?

I’ve had a bit of a Forest Gump career, from promoting music festivals to working in IT. But my work always came back to project and job management. Thirteen years ago, my friend Drew and I embarked on setting up a construction company in the insurance industry, Australian Building & Construction Group. ABCG now works with some of the largest insurers in the country.

Through our own (expensive and tumultuous) journey of configuring a bespoke software for ABCG, we realised that there was a demand for a highly configurable and dynamic project platform for field services.

So, we decided to start Codafication and build that tool. However, we quickly realised that the tool would need to speak to core legacy systems if we wanted it to integrate back into the insurers. Now, many of these legacy systems have very complicated or sometimes non-existent data structures. So, we took a few step backs and built Unity. It’s a private cloud platform that can make sense of legacy data and systems.

We then used the Unity framework to build Crunchwork, our end-to-end project platform for insurance supply chains. It’s a sort of perfect storm; we can solve a legacy transformation problem with Unity, but then plug in our project and job management solution, Crunchwork, on top of that to solve pain points across the entire supply chain.

Any key stats, data, reports, research you can provide to give flavor to the opportunity/problem?

There is a wealth of tasks that we take for granted that are incredibly time-consuming and costly for a large insurer. For example, take something like classifying documents once they enter your legacy system. One insurer we work with used to have to rekey between multiple systems, download and reattach, renter info, etc. to complete that task.

Our platform natively does that classification. It sounds simple, but for an insurer that saves in excess of 600 hours per year. There are endless tasks like that that we can eliminate with our tech. Our software is saving millions of dollars through business optimization for things that we take for granted. 

What does Codafication do? Who is the solution for? What problem does it solve?

Codafication is a globally awarded digital services and software company. We’ve created three SaaS products: Crunchwork, Virtual Assist, and Unity.

Crunchwork is an end-to-end project and business management platform for insurance supply chains and field teams. It’s the simpler way to manage everything, from anywhere.

Virtual Assist is a virtual triage tool. It’s secure, professional, and app-free video streaming for business.

Unity Cloud allows developers to build and ship software in minutes, not months. In any language, on any database. Unity is our secret-sauce. We originally created the software development platform (Unity) and now we use that platform to create other products like Crunchwork and Virtual Assist. With Unity, many companies buy access to the software or simply contract Codafication to build them a custom platform using Unity. Unity helps insurers to rapidly ideate, test, and deploy. It can create the framework large insurers need to accelerate digital transformation.

Our solutions are already being used by various industry leaders, including Suncorp Group, IAG, Urban Utilities, QBE Insurance, Youi Insurance, Aon, and more.

What is your elevator pitch?

Pioneering new ways to make the world simpler.

What is unique about Codafication?

Three things come to mind. Our design and build with methodology, being self-funded, and our extensive market research before we got started. We spent 2 years researching the market and honed our use cases to get product market fit. Whereas your typical startup has an idea, and only has 12 months of runway to sink or swim.

We invested heavily in talking to twenty of the largest insurers in Australia to understand their pain points and how they want to transform their business. Then we mapped out the technology to solve their problems not only for today, but for the next 5-10 years.

What have you learnt about raising capital?

We’re fortunate that we’re completely self-funded and haven’t had to raise capital. We’re proud to have built Codafication organically. By the next financial year, we’ll have grown to over 50 team members.

What do you think Corporates can learn from early stage businesses?

Both parties can definitely learn from one another. The enterprise can learn ways to ideate and use current tools and methodologies to get to an MVP that becomes a solution. Unfortunately for enterprises, there’s so many key stakeholders in their value chain that a project like that turns into a multi-month or multi-year endeavor. Because startups don’t have as much red tape or stakeholder engagement, they can work quickly in a vacuum to ideate, whiteboard, document, and output a solution. On the other hand, startups can also learn a lot from corporates on regulatory requirements, rigor, disaster resiliency, testing, product validation, and more. They’re the things that take a product from a concept to a real thing in the real world.

Where do Corporates need to improve in working with/supporting early stage businesses?

To improve working relationships, I think corporates need to get clear on what they’re after from the relationship and communicate that effectively. Are they a buy, build, or partner company? And, if they are a partner company, they need to be clear on their rules of engagement to ensure they’re not wasting a startups time.

The problem is a lot of large businesses bring in a startup through the business chain or an IT channel, and then they ping pong them around the organization. This can mean months of demos, presentations, and constantly repeating conversations to various stakeholders. Then, when it finally gets to procurement, they realize one of their fundamental rules of engagement can’t be met and the relationship needs to end. To a big corporate the lost time may not mean much, but it’s a significant blow to a startup. Corporates need to start the process with clear, succinct rules of engagement and a frank discussion on the corporate’s appetite for risk and partnering. We need to bring that turning point to the beginning of the process.

I also see a lot of corporates who need to let go of their enterprise ego – approaching startups thinking that they can just buy the whole startup, or do what the startup does internally with their own abundance of resources. There’s so much value in partnering with a startup. If you choose a startup at the right maturity level, they can bring agility and laser-like focus to solving a problem, and a fresh approach to tech.

Looking back, with what you know now, what would you have done differently?

Because we pursued market research so strongly in the beginning, we were a bit obfuscated in our mission statement and what we could offer. As we were figuring out how to commercialize, we offered anything to anyone. Now, after years of refinement and getting our communication and product-market fit right, we’re clear on who we can help and how. Although our tech can be configured to almost any industry, narrowing down our value proposition has been the key to ongoing success. 

Where do see your Codafication in ten years time?

Definitely as a globally scaled business with an established partner network that allows us to grow and solve enterprise-wide business and digital transformation problems.

Biggest challenge you have faced so far?

As a self-funded startup, our biggest challenge has definitely been balancing the competing priorities of meeting client needs and wants and trying to maintain our product roadmap. We’re starting to do that successfully, but at one point it slowed the business down. We had to take a beat and go slow to go fast. Now, we’re really hitting our stride and scaling. If we had more funding to start with, we may have been able to accelerate our growth journey. However, it would have meant selling off equity at a highly discounted rate. Instead, we’re in a great position now for long-term growth.

Example of a good result with Codafication?

For the past 12 months we’ve been working on a co-build with a large Australian Insurer. We’re helping replace core systems and upgrade their claim management workflow. This project is already having significant transformation benefits to the organisation.

For another client, Aon, we built field mobility tools to digitize their entire risk and underwriting valuation process. Now those tools are being scaled globally into new markets. They can be used offline but synchronize into the cloud, which means that they can solve surveying for anything from oil rigs with no connectivity, to mammoth commercial structures.

There’s also Suncorp, who implemented our virtual triage technology Virtual Assist as a way to keep teams, partners, and customers safe amidst Covid-19. The technology allows them to complete the upfront claims triage remotely and securely.

What are the key disruptive forces you see facing the insurance industry?

There are three key disruptive forces I’m seeing at the moment. The first is the collapsing of the traditional value chain model where you’ve got the broker, the insurer, and the business operations that does the fulfillment. From what we’ve seen, an insurance marketplace at point of sale is becoming more and more predominant. Where, if you’re buying a product or service at that point in time, someone can offer you insurance. A classic example is the partnership happening between Tesla and the insurance industry, where Tesla own the manufacturing, they own the telematics data, and now they’re looking at an ambitious journey to partner or underwrite their own product at point of sale. It’s the same with Amazon testing insurance in the Indian market – they’ve got a financial service license now and they’re building out that value proposition over in India. Another example is Zhongan. They’re an API-first digital underwriter that’s plugged into Alibaba and many other insurers, providing digitized underwriting and modernizing at point-of-sale insurance. A lot of the traditional landscape of the value chain is getting compressed.

The other major area where there’s change coming is the optimization of claims operations. The industry has been so focused on product distribution and selling, instead of focusing on their claims processes which is where the cost centre is. Back of house, it’s a race to the bottom line. Unless they’re optimizing their cost centre and business operations, they’re not going to be able to compete as impressively on price.

Finally, I’m seeing a lot of emerging insurers winning over customers with their modern, Uber-esque customer experience. A lot of the legacy incumbent insurers that are over 100 years old have that backlog of legacy technology. They’re trying to digitally transform, but they’ve still operating on core systems that were built in the 70s, 80s, or even early 90s, and it’s hard to pull them out. So they’re trying to build a competitive, modern experience but it turns into a multi-year project with considerable spend. At the end of it they still might not achieve their desired result, and they have to compete against these cloud-first, digitally native newcomers. It’s a major threat to the industry.

What is your focus now? And for the next couple of years?

My focus for the next 12-18 months is scaling into the UK, EU, and US market. We’re going to set up distribution partnerships, the software tooling, the documentation, the commercial framework, etc. so that we can build a partnership network. Our goal is to have other people sell our product on our behalf, so that we can scale quickly into new markets.

What are the one or two lessons/principles/ you carry with you into everything you do?

The first is to surround yourself with the right team members. People who you can empower to imprint their DNA, thought, and logic, on the business. As a business owner, naturally you’re quite close to building the business from the start, but you also need to provide full autonomy to the experts that you’re entrusting to grow the company. I think that’s incredibly valuable to creating the tapestry and texture of what the company is.

The next part – as a tech company – is commercialization. It’s always a fine balance between continual product refinement and generating revenue, and you need to strike a balance between product roadmap and innovation. You don’t’ have to have 99% of the product that 100% of the market expect from day one. You need to be strategic in creating technology that serves current clients and making sure that you accelerate commercializing the business.

Where do you see yourself in 10 years time?

Hopefully, jet-setting around the world to all of our offices. Meeting with key leaders and staff and empowering people in the organization to run Codafication so I can work on the business and the vision. My goal is to spend more time with my family and children as they grow up, and to get the balance between business and family right.

How do you balance your personal time and your ‘work’ time?

I’m getting stricter at investing in myself and keeping to a daily routine. I’m aware of what I need to do to reach my own goals and I book those actions into my day like any other appointment. Overall, I focus on putting myself and my family first, but I also intermix my business and personal priorities throughout the day so that I can strike a better balance daily.

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