AMS Services Pulls the Plug on TowerStreet

In keeping with what has been a challenging year of transition for the AMS Holding Group, its AMS Services Inc. business unit, a provider of software and automation services to the insurance industry, announced the discontinuation of the TowerStreet initiative.

Euan Menzies, CEO of AMS Holding Group, which currently operates several insurance technology companies, including AMS Services, Allenbrook, iiX, Rating Services and Silver Plume, said that the initial TowerStreet concept, launched about two years ago, was to build a number of Internet-based products which would manage the entire insurance process—from rating and quoting all the way through issuance of the policy.

In March 2000, John Ashenhurst, the business developer of TowerStreet and former AMS Holding Group executive vice-president, told Insurance Journal that with TowerStreet, “We believe we’ll finally be able to give agencies everything they’ve always wanted in insurance automation.”

AMS Holding Group underwent major changes in March 2001, when it was reorganized into four separate business units (AMS Services; a combined AMS Rating Services/TowerStreet/iiX; Silver Plume; and Allenbrook). In October, the holding group was again officially reorganized, with the Rating Services unit merging with AMS Services. Allenbrook, Silver Plume and iiX remain separate units.

“Originally, the development plan…was to position TowerStreet as a separate, Internet-based company, and perhaps take it out as a separate public company,” Menzies said. However, by the end of last year, it had become clear that “the chances of taking out a fairly nascent activity as a stand-alone public company was going to be increasingly difficult.”

It was then that some of the investment in the TowerSteet initiative was repositioned primarily as a point of sale activity for the agent community. “Once that was successful, we would have continued to move forward and extend the effort by looking at other parts of the insurance chain—connectivity in the carrier market itself,” Menzies said.

As things progressed and the agent point of sale product was launched to a number of states, Menzies said a realization set in that it was going to be difficult to achieve significant acceleration of revenue with the new product.

About a month ago, Menzies said a conclusion was reached that a disproportionate amount of investment capital would have to be allocated to TowerStreet to keep it moving forward. “We wanted to make sure that we had enough capital to invest across the entire set of the AMS companies, and we decided to pull back from the initiative,” he said.

Menzies joined the AMS Holding Group a little more than a year ago as president and COO. The plan was that Menzies would spend most of his time working with AMS Services president Loren Parsons and other managers within Silver Plume and iiX. Ken Benvenuto, who was then the CEO of the holding group, was going to personally spearhead the TowerStreet initiative. It was also around that time that Ashenhurst left the company. In early March of 2001, Benvenuto resigned, and Menzies was made acting CEO of the holding group, a position he was formally promoted to last May. Menzies also serves as the CEO for Allenbrook.

“The product line we have shut down, TowerStreet, is the Internet point of sale product,” Menzies explained. “All of the other agency, comparative-rating products that we own under the AMS or the Rating Services brand name continue to be supported…The name TowerStreet will disappear completely.

“We have hosted versions of our management systems products…and I think we will look to deliver hosted versions of our comparative rating products,” Menzies continued. “Some of the…benefits agents could receive by using a hosted management system, for example, will continue to play our in other products. We’re not actually going to reuse any of the TowerStreet technology, but some of the concepts will continue to live on in other products.”

Menzies said that most of the people that signed up and began paying for the TowerStreet product “were customers of our traditional desktop-rating product. We’ll be helping them move back to that platform as an alternative.”

In fact, Menzies described the overall response to the TowerStreet product as “quite underwhelming.” He added that this was most likely influenced by two key factors: “the combination of the change in the economic environment and the fact that we probably over-promoted the product against what we initially delivered.”