Eddystone-based InsPro Technologies latest Philly-area insurance software growth story
140th on Deloitte Fast 500
Tom Paine
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In case you haven't noticed, the job of automating many tasks in the traditionally information and paper intensive insurance industry is a booming business in the Philly area. iPipeline is perhaps the hottest startup in the region, having received a $71 million VC investment earlier in the year. InstaMed has also gained prominence as a processor of healthcare payments. AdminServer sold out to Oracle a few years back, and its founders have a new startup, Adminovate, based in Philadelphia. Others to watch include Unirisx and Bethlehem-based Adaptik, which focus on property and casualty insurance. Given its extensive industry presence, Philadelphia has a deep pool of talent with an understanding of both the insurance business itself and its technology needs.
But another emerging player earning attention is Eddystone (Delaware County)-based InsPro Technologies, which serves the Health and Life insurance industries. InsPro was just named to Deloitte’s Technology Fast 500, ranking 140th in the US, with revenue growth of 694 percent from 2007 to 2011. It should rank about 7th on the Philly Fast 50 when Deloitte releases that.
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InsPro markets an integrated, comprehensive enterprise SaaS suite for companies marketing life and health policies, both to groups and individuals. When I asked CEO Robert Oakes whether there was overlap between what InsPro and iPipeline does, he replied that "iPipeline covers only a portion of what we do", and I don't think he was boasting. InsPro's technology platform is built around Java, is database agnostic, and uses thin clients as end-user devices. They provide hosting via Wayne-based SunGard Availability Services.
InsPro only has 15 customers, but they are among the big players in the insurance industry, and InsPro competes against companies such as Oracle. Its two largest customers accounted for 48% of revenue in the first nine months of this year. Revenue almost doubled in the 3rd quarter of 2012 from the prior year to $3.4 million. InsPro is still operating at a loss of over $1 million per quarter as it continues to invest in building out its software. Professional services fees account for about half of its revenues, indicating that considerable customization goes into its customer installations. InsPro had $2 million in the bank as of the end of September and shortly thereafter in October entered into a agreement with Silicon Valley Bank for a $2 million credit facility. It has about 110 employees.
InsPro has raised almost $30 million since 2007 according to SEC filings I can locate. Investors include Radnor-based Cross Atlantic Capital Partners, legendary tech investor Warren "Pete" Musser, and as of late 2010 Independence Blue Cross. Oakes indicated to me that one more substantial equity raise is in the works, after which the company should be over the hump in terms of funding. He suggested that revenue growth of 50% per year over the next two years is achievable.
InsPro Technologies was one of those consulting firms that eventually morphs into a software company. It was founded by Oakes in 1986 as Atiam Technologies, changing its name in 2009 to reflect that of its software suite. Health Benefits Direct acquired Atiam in 2007 for $3 million, and in late 2010 Health Benefits Direct changed its name to InsPro Technologies Corporation, having divested some other insurance related offerings. InsPro Technologies Corporation is thinly traded over the OTC Bulletin Board (ITCC), although the majority of its value lies in its preferred (not publicly traded) shares.
Oakes says the Affordable Care Act, as (and to what extent) it is implemented, should benefit InsPro's healthcare business by placing more emphasis on supplemental forms of coverage that some of its customers market. Oakes also see new product iniatives that should add to the life insurance side of the business as well.
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