Published on the Insurance Newslink Infobase of global strategic trends-www.insurancenewslink.com
Insurance Newslink has been repoting on the progress of Dublin-based FINEOS Corporation, the claims processing solution specialist, for most of its 17 years in business. We caught up with CEO Michael Kelly to hear about the latest positioning of the company whose clients are now spread over four continents.
Kelly said the key moment in the company’s development was around seven years ago when “big bang” replacement of legacy policy administration systems was seriously slowing down. Up to that time FINEOS had a number of software offerings across insurance and financial services. Internet was becoming a commercial force and FINEOS decided to focus on one major area – online claims processing. That decision has proved to be a masterstroke, as the insurance software market generally reacted more slowly to the fact that total replacement of an insurer’s systems in one development was unlikely, and a phased online component-based approach is now favoured.
FINEOS had the foresight and also the global vision. The company now has 330 employees, a turnover of $50m, and has been profitable every year except one. Kelly explained that a niche claims presence has been established in government/social insurance in Australasia, Canada, and South Africa, and in the US market with disability and workers’ compensation. Most of the company’s general insurance clients have been outside the UK because other markets were moving quicker – but UK retail is now being targeted. Insurance Newslink attended a FINEOS event for the London Market last week, and the company has recently signed up its first customer there. Asia is another target area. The company is building up a higher profile through events, and is holding its 4th Global Claims Summit in Chicago in October – the regular venue.
Some of the key features of the FINEOS offering are the electronic sharing of information across insurer, business partners and the policyholder; predictive and process analytics; and the ease of integration of external specialist databases.
The proof of the pudding is in the eating. A Dutch insurer reduced claims expenses by €3m in the first year and improved customer retention by 20%, and in Ireland, a general insurer reduced claims administration costs by 15% and headcount by 25%. A US insurer reduced documents and paper by 40$ and by dealing with 2% more claims as short term disability rather than long term, saved enough to pay for the system. Another insurer experienced a 30% improvement in quality fraud referrals due to a single analytics application.
Kelly stated that FINEOS now has 40 claims clients globally covering the whole multi-line short and long tail range of property, casualty, workers’ compensation, disabilily and life, and he added that the company is generally beating the competition for the bigger deals.
Kelly is a hands-on CEO, spending most of his time travelling the globe keeping in close contact with customers – he also always adds a personal comment at the foot of every press release. He believes in inviting sector experts onto the board, the latest being Peter Le Beau, a doyen of the European protection and health insurance market.
Kelly has had a long experience in the insurance software market, stretching back before the FINEOS success story, beginning his career with an Irish insurer who is now a client – he says Ireland “is a good home for developing software.”
Few insurance software specialists can claim to be truly global but the decision by the company to specialise across the whole range of claims has put them on the worldwide map.