Rashmi “Rush” Melgiri stared at her screen, fighting the urge to scream. Another policy cancellation had triggered a cascade of spreadsheet updates, manual calculations, and endless email chains. As co-founder of CoverWallet, she'd built a modern insurance platform—yet here she was, drowning in back-office chaos.
"I was literally managing millions in funds through spreadsheets," Rush recalls, shaking her head. "On the surface, it seemed straightforward: collect payments, distribute commissions, handle refunds. But in insurance, nothing is ever simple. One policy change would eat up hours of our team's time."
That breaking point led Rush to create Functional Finance, a company born from countless nights wrestling with insurance's hidden crisis: the broken back office. In an industry where global premiums exceed $9 trillion annually, billions are lost to inefficiencies, errors, and manual processes that shouldn't exist in 2025.
In most industries, unusual scenarios are rare exceptions. In insurance, it's every other day. "People talk about edge cases, but here's the truth—they make up 30% of our daily work," Rush explains. "Every policy cancellation, every mid-term adjustment cascades through the entire system. And when you're juggling thousands of policies, that cascade becomes an avalanche."
Traditional financial software falters here because it wasn't built for insurance's unique demands. A simple refund becomes a complex dance of compliance rules, carrier requirements, and careful fund separation. Rush saw companies across the insurance industry—from small agencies to major carriers—struggling with the same problems she faced at CoverWallet.
At its core, Functional Finance is streamlining how insurance money moves. When a policy changes mid-term, the platform automatically recalculates every financial domino—from premium adjustments to commission clawbacks. What once took days happens in seconds.
“Having co-founded AP Intego and seen its integration into Next Insurance, I’ve experienced firsthand the challenges insurance operators face,” says Steve Hauck. “For MGAs, carriers, and insurers, what’s been done manually for over a century is now automated. The system handles splitting payments, managing escrow for compliance, and using AI to read broker remittances and mark off invoices. Instead of having someone sit there doing it manually, you can suck out those costs, create efficiencies, speed up operations, and realize financial return.”
The platform's intelligence extends beyond basic calculations. When a policy cancels, it automatically initiates commission clawbacks, adjusts premium allocations, and handles refund processing—all while maintaining strict compliance with non-commingling requirements.
The impact goes beyond saving time. When back-office operations break down, it erodes trust—between agencies and carriers, between companies and customers. A delayed commission payment or mishandled refund can damage relationships built over years.
"We had a client whose team was spending 40 hours a month just on commission calculations," Rush explains. "Now they do it in minutes, with perfect accuracy. But more importantly, their partners know they can count on getting paid correctly and on time."
What sets Functional Finance apart is its deep understanding of insurance's regulatory landscape. The platform maintains separate ledgers for each entity, automatically routing funds to the appropriate accounts to ensure compliance with non-commingling rules. Built-in controls align with SOX requirements, while real-time reporting makes audits less painful.
"Traditional fintech solutions fail here because they try to force insurance into a generic mold," says Rush. "Our team—including MIT-trained engineers and insurance vets—built this just for insurance companies."
The results speak for themselves. One client reduced reconciliation errors by 95% within three months. Another saved over 100 hours monthly on payment processing. "But the real win," Rush adds, "is giving people their time back to focus on what matters—serving customers and growing their business."
Fresh off a $20 million Series A led by Walkabout Ventures, with participation from Munich Re Ventures and Corvus Insurance founder Phil Edmundson, Functional Finance is expanding its vision. The September 2024 funding round follows an $8 million seed round backed by notable investors including New Enterprise Associates (NEA), Altai Ventures, and Starr Insurance. The company's explosive growth—with premium payment volume increasing more than 2,500 percent year-over-year—validates the urgent need for their solution.
"We're building more than software," says Rush, who, alongside Co-Founder and CTO Tony DeGangi and President Jim Ermilio, leads a team deeply versed in both insurance and technology. "We're creating a network where carriers, MGAs, and brokers can work together seamlessly. When everyone has real-time visibility into financial flows, it transforms how business gets done."
The platform integrates seamlessly with any policy administration system, ERP, and accounting software, offering system-agnostic compatibility that eliminates the need for costly overhauls. "Our onboarding process helps us deeply understand client needs," says Rush. "That’s why tools like predictive analytics for cash flow management and expanded API integrations are being developed based on client feedback." As the solution continues to evolve, Rush, Tony, and Jim remain dedicated to their core mission: solving real problems for real people in insurance operations.
Rush's journey from managing an MGA to founding Functional Finance taught her valuable lessons about solving complex, industry-wide problems. "The hardest problems are often the ones most worth solving," she reflects. "You have to be willing to dive deep—to truly understand the daily frustrations of the people doing the work."
For insurance companies—whether launching new insurance programs or streamlining enterprise systems—Rush offers this advice: "Don’t be afraid of challenges that seem too big or too entrenched—those are often where the biggest opportunities lie."
The insurance industry is finally embracing digital transformation, and back-office operations are the next frontier. With insurers handling trillions in premiums annually, the opportunity for improvement is massive.
"Every demo we do, someone says 'This is exactly what we've been waiting for,'" Rush says. "That's when you know you're solving a real problem—when people see your solution and immediately recognize their own pain points in it."
For an industry built on managing risk, insurance has left its back office operations to chance for too long. Rush and Functional Finance are showing there's a better way—one automated calculation at a time.
Ready to replace tedious tasks with fast, accurate workflows? Book a free live demo of the #1 insurance financial operations platform today.
