When John Pergande took over as chairman and CEO of INSpire Insurance Solutions last fall, he had a clear vision for the company’s mission and he knew what needed to be done to turn the then-faltering company around.
With little hesitation, Pergande assembled a new management team, cut expenses and put in place a 100-day plan to address the critical issues the Fort Worth -based provider of services for the property/ casualty industry was facing.
Among those issues was reducing implementation time of the INSpire solution which had been taking as long as six months. It was the most critical, Pergande determined.
“Way too long,” he said. His goal was to cut implementation time in half. “If we could do this, I thought, we could double the size of the market we serve.” He knew reducing implementation time was also key to INSpire’s survival.
After barely six months, INSpire has been able to implement in as little as eight weeks. “The time-to-market implications for our customers are dramatic.” The faster implementation process is made possible by two main components: INSpire’s INSideOUT software suite and the company’s project management team.
Pergande further commented that there seems to be renewed interest in the potential of outsourcing to help mid-sized P/C companies reduce their operating costs and risks. These companies represent INSpire’s target market.
Pergande also believes success lies in being small and fast. “I know the insurance industry is ‘risk adverse,’ but we all take risks every day.” He said the company would likely be half the size it was a year ago, “Half the revenue and half the employees.” This scaled-back size will allow INSpire to be more effective.
“We needed a plan that would minimize the risk and encourage insurance professionals to outsource those activities that we could do better than insurers,” said Pergande.
Part of that plan anticipates some lost business, he admitted. “Some of that is not a bad thing. These clients did not appear to be positive and ongoing,” said Pergande. “I think they may have been a cash drain in the long run.
“The absence of these accounts will now permit INSpire to concentrate on its core business,” he said.
Pergande was already well aware of the company’s core competencies and the potential those represented for providing significant cost savings to its P/C clients. “The company has a track record of providing first-rate customer service from experienced insurance professionals using state-of-the-art technology,” said Pergande.
Pergande’s involvement with INSpire began in October 1999 when he acquired a 12.3 percent stake in the company. The following June he was appointed to the board of directors and in September he was named CEO and chairman.
Prior experience includes serving as chairman and CFO of Pyramid Services, a developer of insurance claims-processing software. He is also the founder of InsureZone where he served as chairman.
Pergande notes he began to crystallize his vision for INSpire while working on creation of InsureZone.
“We became convinced that we could earn significant returns by funding best-of-breed service providers within the insurance industry. It was our belief that business models that had solid ‘brick-and-mortar’ operations selling insurance services could leverage a technology investment to supercharge their companies.
“The insurance industry is huge, totaling $700 billion annually. In addition, technology investment by insurance companies has lagged the rest of the financial services industry for an extended period of time. Finally, few existing models have proven that they could survive with an Internet-only strategy for new business generation.
“I was interested in the whole lifecycle of an insurance policy from marketing to claims handling,” Pergande continued. “The first area where we thought we could have an impact was in the agent selling process, and that belief became InsureZone. The next area of interest was in electronically handling policy issuance and claims. If we can merge the agent functionality of InsureZone with the back-office skills of INSpire, we would be able to offer all of the services necessary to be a Virtual Insurance Company. That is my vision.”
With INSpire’s critical issues now under control, Pergande is taking steps to demonstrate that INSpire can deliver. He believes the company is now positioned to save insurers up to 25 percent of the cost of handling policy issuance and claims processing and the associated services.
“INSpire can now issue policies and policy endorsements in a matter of days, not months,” he said. “We have improved service by as much as 40 percent and we will provide the required training for all customers.”
“There is still skepticism about INSpire in the marketplace. That’s to be expected,” said Pergande. “INSpire was a high-flyer, and people can see what happened. It will take some time and a lot of hard work to restore the confidence required to succeed. But we are making strides.”
He cited the company’s relationship with Tokio Marine. The company went live in April with INSpire’s Web-enabled IT outsourcing system for the U.S. branch – The Tokio Marine and Fire Insurance Co. Ltd., the US operating entity of The Tokio Marine and Fire Insurance Co. Ltd., the Tokyo insurance giant. Tokio Marine will use INSpire’s system to process its personal automobile and homeowners policies in California.
John Bruner, vice president at Tokio Marine, said in the future the company plans to include new lines of business such as fire and personal umbrella policies.
Currently, INSpire is providing data center services, application maintenance and enhancements, and printing services, which will allow Tokio Marine’s agents, customer support representatives and underwriting staff members to complete policy and claims administration processes online. This system is launched on the heels of Tokio Marine’s recent installation of INSpire’s Web-based tool, eINSpire.
As a key component of its marketing thrust, INSpire has also announced a promotional event whereby Pergande said the company would implement its base outsourcing solution for one line of insurance in one state – free of charge.
“This offer demonstrates our renewed commitment to faster implementation of INSpire’s unique suite of products and services,” said Pergande.
“INSpire is ready to prove itself in the marketplace. We believe we have best-of-breed software and outsourcing services, and a new, disciplined implementation process in place. With our software tools and shortened implementation procedures, we believe we are setting a new standard for the industry,” said Pergande.