Subscribe in a reader
Subscribe to Philadelphia Tech News by Email
Eddystone (Delaware County)-based InsPro Technologies has flown under the radar among Philly area startups until recently, but now appears to be emerging as a significant factor in the insurance software industry, providing enterprise solutions to life, health and annuity providers. Revenue in the first quarter of 2013 grew 92% over 2012 to $4.6 million. Loss from continuing operations was $64,791 in the first quarter of 2013, compared to a loss of $744,517 in the first quarter of the prior year.
As it moves beyond the initial challenge of getting its first few major clients rolled out, Oakes says InsPro is gearing up and building the infrastructure for broader growth.
During 2012, InsPro brought onboard 40 new employees, bringing its total headcount to 115. It strengthened its senior management depth in areas such as customer service, strategic partnership management and marketing (InsPro's new Chief Marketing Officer, Sandra Taylor, has a Ph.D.; even though her's is more related to English literature than marketing, there are similarities between then two fields).
In March of 2013, InsPro announced the expansion of its Senior Market portfolio with the addition of fixed and indexed annuity product support, significantly expanding its addressable market. Fully integrated with InsPro Enterprise, the new capability recognzises the emergence of annuities as a preferred portfolio component for many seniors and the increasing need for tightly integrated insurance administrative systems' support.
In February, IGate, one of the world's largest business process outsourcers (BPOs), announced it had selected the InsPro Enterprise application suite to manage its Third Party Administration (TPA) business. The InsPro/iGate relationship dates back to 2010. InsPro said iGate went live with InsPro Enterprise in June.
Its a relatively small world among insurance software firms in the Philadelphia area, and many of the principals of the different firms know each other and have worked together before. Alumni of AdminSever, the Chester-based insurance tech firm acquired by Oracle in 2008, are sprinkled around Philadelphia startup Adminovate, InsPro and Exton-based iPipeline. While Adminovate and InsPro are competitors, both have working relationships with iPipeline and are listed as "solution partners" on iPipeline's website. While iPipeline's forte has been more on the front-end (enrollment) side of the business, Adminovate's and InsPro's strengths are more on the back-end policy administration side, and the two latter firms may eventually handle such functions for some iPipeline customers, although no deployments of joint customers have been announced yet by either InsPro or Adminovate.
Oracle remains a major competitor in the policy administration space. In March, SAP made a splash by acquiring Montreal-based Camilion, although Oakes says Camilion seems more property & casualty-focused and he hasn't seen much of a presence from SAP in the Life/Annuity/Health space yet. (Camilion also partners with Oracle in some areas.)
Global insurance IT spending is $140 billion annually, according to industry research firm Celent, and there is still considerable room for third party software solutions to replace inhouse systems. Also, under the Affordable Care Act, health insurers presumably face increased pressure to reduce administrative costs. InsPro at this point still has a fairly small number of customers, several of whom are quite large. The life/health/annuity industry is relatively concentrated universe of mostly large competitors, but Oakes says InsPro has just begun to broaden its scope to market to more potential customers. Areas he sees for expansion are the Blues (Independence Blue Cross is an investor in InsPro, for example) and international markets.
InsPro's technology platform is built around Java, is database agnostic, and uses thin clients as end-user devices. InsPro Enterprise is available on premise or as a remote hosted application.
InsPro Technologies has received total VC investments in the $12 to $14 million range, Oakes said. (My earlier article cited a higher figure based on past SEC filings, but when I asked for clarification Oakes said the additional amount was related to a predecessor firm which has since been sold.) Radnor-based Cross Atlantic Capital Partners has been a major funder. InsPro Technologies was ranked 140th on Deloitte's national Fast 500 for 2012, and Philly Tech News recently ranked InsPro 31st among Philly tech startups, which Oakes thinks is too low (and he may have a point).