INSpire Insurance Solutions Inc. may see its 2001 revenues cut due to the actions of troubled insurer Millers American Group. Millers is pulling out of some contracts and doing more business in-house as it plans to sell three business lines.
Under a five-year agreement signed just last year, INSpire expected 2000 revenues of around $24 million from Millers. While the changes are not expected to affect 2000 revenues, if Millers, or the buyer of the businesses to be sold, terminates contracts with INSpire, revenues for 2001 would fall by about $19 million, representing about 13 percent of INSpire’s total $141 million 1999 revenues.
This is not the only contract INSpire has lost. Just two weeks ago the company announced it would take a pretax charge of $13 million to $14 million to cover the cost of a terminated contract with Island Insurance Co., a Hawaiian insurer. Chief Executive John Pergande said INSpire spent roughly $13 million, mostly in staff time, to adapt Island’s policies and existing computer system to Inspire’s software. Pergande said Inspire took the writeoff because it will not recover its costs in the contract.
Was this article valuable?
Here are more articles you may enjoy.