Seeking to expand its offerings to North American customers, Innovation Group (Hartford/Whitely, U.K.) in November acquired claim-reporting outsourcing software and services provider First Notice Systems (Boston) and SurePlan International Pty Ltd., an Australia-based holding company that owns 51 percent of SurePlan USA, a provider of outsourced claims management services to the vehicle leasing and fleet industry. Innovation Group had already acquired another subsidiary, SurePlan Australian Pty Ltd., in May.
The acquisitions position Innovation Group for a significant expansion of its presence in the United States market for business process outsourcing (BPO) for claims and related services, according to Donald Light, a San Francisco-based analyst with Celent. "These two acquisitions give Innovation Group a significant footprint today and potentially a platform for expanding the range of BPO services it provides to insurers, TPAs and self-insured companies," he says.
Innovation Group purchased First Notice, described by Light as a leader in developing technology and services to take the first notice of loss (FNOL) from policyholders to spark quick and accurate claims handling, from Concentra Operating Corporation for $51.55 million in cash, comprising consideration of $50 million and related payments of $1.55 million, according to an Innovation Group source. The deal is expected to close by the end of the fourth quarter of 2006. SurePlan did not disclose the terms of its deal.
"The ability to provide BPO capability to North American customers like we do in other markets has been [a top priority] for the past couple of years, but we needed the credibility and customer performance in this market to do it," says Ed Ossie, president, Innovation Group.
That credibility has been built over the past couple of years by what Ossie describes as "improving equity and meaning with key customers." He cites a 24 percent organic growth year over year, which the company has forecast to continue in predictive statements. "On the heels of success we're able to expand and do a little more to achieve a critical mass," Ossie comments.
The primary impetus for the acquisitions was to provide customer options, says Ossie: "Our customers are making choices every day, and we need to be in a position to provide them choices to engage with us, whether that's through a policy admin system or some support around FNOL during times of overflow or catastrophe. If you're thin and only do a few things, you're going to strain to develop deeper relationships with your customers."
The additions of First Notice Systems and SurePlan's U.S. operation, Ossie adds, "provide us with complete motor claim outsourcing capability for personal, commercial and self-insured or fleet."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio