“I’ve always been close to our development, sales, support, and those services that drive our business. I prefer to be focused on where the action is.”
— James P. Kellner
Chairman and CEO
Technology
Where the action is
New ownership at Applied Systems
is poised to respond to fresh opportunities
by Nancy Doucette
“I’ve always been close to our development, sales, support, and those services that drive our business. I prefer to be focused on where the action is.”
— James P. Kellner |
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“After serving as the apprentice for 19 years, I now have the chance I always wanted. But it is no small task to improve an already great company.” The “great company” in this case is Applied Systems, a provider of automation solutions for the property/casualty insurance industry. The “I” in this instance is James P. Kellner, chairman and CEO of Applied Systems, who explains: “I’ve owned a little piece of Applied Systems for some time, so I can’t say I’ve always wanted to own it.” On September 21, 2004, Kellner realized his long-time goal of being the sole decision maker for Applied Systems when he and Vista Equity Partners, a private equity firm that invests in private and public technology-enabled companies, bought Applied Systems organization’s agency management systems products The Agency Manager®, The Agency Manager Vision Series™, and Doris from founder Robert Eustace.
Kellner became president of Applied Systems in 1991 and by virtue of his having a top executive position for some time, he says, “My business philosophies aren’t going to change,” as a result of the change in ownership. “There’s a lot of stability here,” he says. “I have the passion to do it right for our customers, our employees, for the industry, and for the shareholders.”
Kellner says there are distinctions between “his” Applied Systems and that of the previous ownership. “I’ve always been close to our development, sales, support, and those services that drive our business. I prefer to be focused on where the action is.”
Without a dual-headed leadership, that preference, he explains, will manifest itself in better execution on delivering products and services, employees will have more accountability, and the organization as a whole will have a tighter alignment.
Applied Systems began as a one-product organization. Over time its product line has expanded to include software for independent insurance agents, brokers, managing general agents, and insurance companies as well as banks and other financial institutions with insurance operations. “Applied Systems builds and innovates,” Kellner notes. But there were times, under the previous management, where development efforts didn’t have a clear-cut goal. “My background is programming, development and the sales and marketing of products,” he emphasizes. “I trust my knowledge of the insurance industry and its inner workings at the transaction level. That knowledge translates into product offerings that remedy the redundant workflows between carriers and agents and brokers. I don’t experiment. Going forward, we’re going to be exact with the product offering.”
Vista Equity Partners Managing Director Robert Smith says one of the things that makes Applied Systems a good fit with Vista’s strategy of partnering with executives in technology-oriented, high-growth potential industries is Applied’s “strong product offerings, its loyal and satisfied customers, and its talented employees.”
Apparently Applied’s customers are loyal and satisfied. Kellner notes that Applied’s customer retention rate is in the upper 90 percentile and “very close to 100% if agents would stop acquiring and merging with each other.” And with some 110,000 users, that’s no small accomplishment. Perhaps it has something to do with acknowledging that every agency operation has some unique technology needs. “Applied’s founding principle of building the product and enriching it through numerous lifecycle updates has afforded us the luxury of product depth with which no competitor can compare,” Kellner says.
Additionally, Applied’s product line includes a programming interface toolkit that facilitates the interface between Applied’s agency management system product and third-party products. “The customer decides who the third-party relationship is with and that relationship is unique between the agency, Applied, and the third-party vendor,” Kellner explains. “This enables customers to improve their specific workflows or product offerings from their management system, allowing them to be as efficient as possible.”
The industry also acknowledges Applied’s leadership in product offerings, in particular in the area of connectivity and data exchange. ACORD has honored Applied Systems with its Upload/Download Vendor Of The Year award every year since 1993, when the awards began. ACORD has awarded several additional honors to Applied for the vendor’s development efforts in the areas of XML straight through processing, XML business integration, early forms adoption, and XML certification.
Kellner points out that Applied’s commitment to interface is long-standing. The vendor has participated in the ACORD standards process since 1985, and is an active participant in ACORD XML working groups, advisory committees, and subcommittees. During that time, Applied has achieved a number of “firsts.”
• In 1986, Applied completed the first batch upload transaction using overnight mailboxing to a carrier.
• In 1989, Applied completed the first batch download transaction using overnight mailboxing to an agency.
• In 1999, Applied completed the first real-time interface activity—an immediate request/response transaction using ACORD ObjX.
• In 2000, Applied completed the first ACORD XML-based real-time interface activity.
• And in 2004, Applied brought Web services-based real-time bi-directional communication capability to its users.
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The real-time capability, which Kellner explains improves communication between agencies and carriers, and provides better and faster customer service, is built into The Agency Manager and Vision products. By activating this feature, agencies can quote and issue policies with those carriers that are processing data in real-time with Applied customers. Additionally, agencies can perform service transactions—billing or claims status, for instance; bridge to a company Web site; process endorsements; or submit loss notices.
The newest of the real-time capabilities is “alert messages.” This feature allows insurance companies to generate messages directly into their agencies’ management systems. The messages will create an activity record attached to the customer, policy or claim record, thereby “alerting” the assigned CSR or producer of an insurance carrier-initiated activity.
Kellner explains that Vista provides what it calls “patient expansion capital” meaning that Vista has a long-term investment perspective, which, Vista explains, is guided by what is in the best interest of its portfolio companies. What’s more, Kellner says, if Vista identifies a product or service that would be worthwhile to the insurance vertical, Vista will help Applied decide if it’s a strategic or financial portfolio fit. “We’ll be able to spread our wings further in the insurance vertical thanks to Vista, which will help us acquire other vendors or build new products. Applied is going to be more investigative about financial or strategic acquisitions in the insurance vertical.”
As for Applied’s exact expansion plans, Kellner points out: “The ownership change just happened in late September. We always finish the year strong with sales growth and that’s where our focus has been. But as we go forward, my goal is to enhance our product and services capability. My team and I know what matters. From top to bottom, we’re going to know what we’re working on and why it matters to our customers.” *
For more information:
Applied Systems
Web site: www.appliedsystems.com