Insurance Age - Smooth operator

Insurance Age - Smooth operator:

Smooth operator

Whether brokers like it or not, technology has become the backbone of the insurance industry, and software providers have stepped up their efforts in a bid to highlight their knowledge of the insurance chain. Michelle Worvell speaks to David Rasche about how his business stands out from the rest with its determination to support customers through both the good and the bad

As executive chairman of a software company that has more than 1,400 individual customers, in addition to the largest share, by revenue, of the UK retail general insurance broker and intermediary systems market, no one can deny that David Rasche is a driven and successful man. His company, Software Solutions Partners (SSP), also has the largest installed base of general insurance systems in the UK.

SSP's size is, in part, due to its acquisition of rival Sirius in May 2007 in a deal worth approximately £43.4m. At the time, Mr Rasche said: "This is a tremendous opportunity to create a market-leading international and national business, with more than 600 of the most experienced IT professionals in the insurance market. Combining these businesses will strengthen our 'consumer to carrier' proposition in the UK through additional products and market segments."

So how has the integration of the two companies progressed? He explains that the biggest task has not been integrating the disparate technologies, but their differing business models. "The Sirius business model was based around making a sale, delivering and then moving onto the next sale. SSP also likes to make sales, but we want to look after customers and ensure that they return to us," he says.

"In the past, Misys - now Open GI - kept people by using tough contracts, and by tying them in the best way it could. However, we maintain positive customer relationships by providing a good service, so that they don't look for an alternative supplier. We are still expanding significantly, and we want to recruit skilled people with knowledge of the industry."

In a nutshell

Mr Rasche says that he is convinced that SSP offers the best technology products in the insurance market, in addition to the most thorough long-term strategy in terms of capability, software and ability to attract quality staff. Although his rivals would doubtlessly disagree, he says that other players in the market are disadvantaged because they operate on a 'here and now' basis.

So how would Mr Rasche sum up his business? "Our key drivers are our concentration on relationships, strong innovation and the ability to bring robust products to market. At the end of the day, our philosophy is about looking after our customers, and doing everything we can to keep them with us," he explains. "If you understand their business, and you demonstrate that you can look after them through the good and the bad, then they will stay with you. This is important to me, both as an individual and as the face of the business."

Mr Rasche claims that SSP is one of the only software houses in the world that understands the insurance chain. This involves knowing point-of-sale systems, broking and call centres, through to distribution channels, whether they are large or small brokers, affinities, bancassurance, carriers or underwriting agencies. He adds that the company's success is due to the fact that it also provides business advice, and not just IT expertise: "You are not just their supplier, you are their business partner."

When asked if he would have done anything different in his career so far, Mr Rasche explains that he had the option to buy the business in 1994 from Sun Alliance. However, if he had taken up the offer, he concedes that he would not have the skills that he does now, in addition to the experience and training of working with a US organisation.

He adds: "I probably wouldn't have been able to create as good a team, although there is a part of me that says, 'I am now doing my own thing at 52 - instead of 42'. However, I would not have understood at the time how much opportunity there was in market terms across both the insurance company and broking sectors."

Although the broking sector has come a long way in terms of its effective use of technology, and the 'green screen era' is starting to fade away, many brokers are still not using it to its full capacity. Instead, they stay with the same provider year after year, afraid to change. However, in Mr Rasche's opinion, what is the biggest mistake that brokers make when it comes to technology?

"Brokers' biggest mistake is not investigating new systems thoroughly - they just get duped by a flash salesman. They should look under the covers and see what the real business benefits are, check that the supplier is strong and able to survive for the long term," he explains.

Mr Rasche advises brokers to talk to other firms about their customer service, and how well they are being looked after by their systems provider. He reiterates that it is not just about the "glitz and glamour", but about full functionality, reputation and taking businesses to the next step.

He provides an example of one firm that has spent a significant amount of time and energy on the process: "When the Willis Network changed suppliers four and half years ago, it went through an extremely vigorous process. It had users look into the depth of the systems, and asked what the technology and support was. If you compare that to the research by other firms, it was more about the glitz and the glamour."

Diminishing sector

Consolidation has not only had an impact on the broking market, as the software industry has also been effected by it within its own sector. It has also had to deal with a rapidly diminishing broker client base. However, Mr Rasche does not see this as a bad thing.

"If you look back through history, there have been periods of significant consolidation, and there has always been new players coming in and out of the market. In the current environment, brokers appear to be much more professional, and the people who run them are, with no disrespect to their forbearers, more professional too," he says. "It's important that they deal with software players that are going to last, as a typical broker uses a system for around 10 years, and not many software houses last that long. We have seen players come and go, but there has also been firms such as Sirius, which has been in the market for 23 years."

Mr Rasche says he feels that the market needs solid players who are financially strong, can continue to support brokers over time, develop software and integrate new technologies. "For example, we have written off approximately £1m with imarket. Will we ever recover that? I don't know. Can small businesses afford to do that? I am not knocking imarket, but there are times where you may need to invest significantly, and need the size and financial stability to be able to do so."

Voicing opinion

SSP's executive chairman is also very vocal when it comes to the acquisition of Open GI by the Towergate Group in 2007. However, he questions whether Open GI brokers should be working in partnership with a software house or a network, and whether the two are mutually exclusive.

"What do brokers want? Do they want to be part of the Towergate network, and receive special products and distribution schemes and have the technology as incidental, or do they want to choose appropriate technology and software support, such as a help desk? I don't see how they can do both."

He adds: "I can clearly see how Towergate will be able to make good money out of this acquisition, and obtain better management information. That analysis will perhaps enable it to develop a better insurance product, and negotiate an even larger commission.

"There is one argument to say that this is good for brokers that want to be in the Towergate network. However, if you look at using technology and the internet more effectively, such as call centres, is that something that an insurer, network or software specialist should be doing?"

Mr Rasche says that SSP has always maintained that it will not compete with its customers, and that it wants to keep their trust. "How can people trust us if I am running a managing general agent (MGA), for example? We are a strongly independent business, and proud of our technology and service. There is no history of a software house being successfully owned by an insurance player, as they usually end up being sold off."

While technology in the broking sector has come along in leaps and bounds in the past five years, Mr Rasche believes that the broking sector will see much greater connectivity and straight-through seamless processing. He also says that brokers need to be better connected for claims information, and that they will need to connect more successfully to their customers.

"We spend a significant amount of our revenue on innovation - more than £3m. We are also starting to design our next generation broking product, and this will be provide the base for all of our broking platforms," he says.

"SSP is committed to supporting our existing products for at least five years, because we have a large number of firms that pay good money to use them. Our competitors would have our customers, and their prospects, believe that this makes it difficult for us to move onto the next generation - but not at all. It makes it easy because we can design a number of solutions with the best features of all of our products that cover all the latest technology and can take the data from any product seamlessly across."

Mr Rasche claims that most of SSP's competitors have not developed new technology. He says that Misys failed to deliver its new technology, CDL is several years behind where it said it would be and that he has not heard of a new technology strategy from Acturis.

"We have the finance, the people and the knowledge to be able to develop the platform that will be able to do all of those things. It will have modules, so that it can cater for both small and large brokers," he says.

"If you look at the way that the market is changing, consolidation is occurring and new start-ups will form, in addition to the rising importance of MGAs. If you are capable of handling the changing market, then brokers will be able to move around and adapt in good time - that's what a large organisation with the right skills and technology can offer the market. This is where I believe that SSP can deliver."

DAVID RASCHE - BIOGRAPHY

- David Rasche started his first business in the entertainment industry while at Nottingham University, graduating with an honours degree in economics and marketing.

- He first became involved in the insurance sector as a director of Sherwood, and was then recruited by Sun Alliance to drive forward the RA Group and North Park Computers.

- In May 1995, it was sold to Continuum, which was in turn acquired by Computer Science Corporation (CSC) in 1996. As managing director and chairman of CSC RA, David helped the business to almost treble its turnover in the four years following its acquisition.

- He left CSC in October 2000 in a bid to find a medium-sized software company that he could buy into and grow. After nine months of looking at opportunities, he made a joint approach with Laurence Walker and their advisers to acquire CSC's retail insurance division. A further nine months later, the buy-in team acquired Software Solutions Partners, one of the UK's leading suppliers to brokers and intermediaries.