We expect to achieve substantial improvements in operational efficiency and cost structure by using this new venture's solution for our back office processes
San Francisco, CA (PRWEB) September 2, 2009
Exigen Capital, a US-based transformational private equity fund and Hollard Insurance, South Africa's largest privately-owned insurance company, today announced they have formed a joint venture that aims to fundamentally alter industry economics and time-to-market for insurance companies worldwide.
In a first for South Africa, the new company will be a shared service 'Business Process Utility' (BPU), which combines insurance-specific technology and expertise to offer insurers a complete back office outsourcing solution. This solution will deliver improved operating effectiveness, reduced and variable administration costs, and rapid launch of new products and new markets.
The new joint venture company, not yet named at press time, is immediately assuming the back office operations of its first customer - Hollard's Bank & Motor Division - with the division's current operations employees joining the new venture. While Hollard will be the new company's first customer, its solution, which leverages a proven software suite from Exigen Insurance Solutions, is expected to scale quickly to serve additional international and local insurers.
"We expect to achieve substantial improvements in operational efficiency and cost structure by using this new venture's solution for our back office processes," said Hollard CEO, Nic Kohler. "Operating costs will be below industry average due to the transformational impact of the Exigen platform and a 'best-shoring' global delivery model. As we are bringing our own people and industry expertise to the new venture, the new joint venture company also represents a unique form of outsourcing that offers growth for Hollard and our employees.
"We also feel that the establishment of this venture is in line with the government's drive to position South Africa as an outsourcing hub. South Africa offers a high-quality, low-risk destination with lower associated costs in a mature insurance and financial services environment; which was a factor in Exigen Capital's investment with Hollard and in South Africa," said Kohler.
According to Greg Shenkman, Managing Partner of Exigen Capital, the company's goal was to create a new business model that greatly reduces operational costs for the entire industry.
"In speaking with insurance industry CEOs & CIOs, we find there is not only intense pressure to reduce operating costs, for improved 'efficiency,' but also to achieve higher 'effectiveness' in terms of revenue leakage and claims expenses. This new company can deliver these transformational benefits to insurers, while allowing them to focus on the strategic and differentiating parts of their business.
"Exigen Capital specifically creates businesses as joint ventures with industry participants who are leaders and innovators. Hollard's leadership in new insurance products such as Pay as You Drive makes them the ideal partner for this investment," said Shenkman.
Analyst firm Celent estimates that the global insurance BPO market for core insurance processes will grow over the next five years to reach $8.7 billion in 2013, an overall compound annual growth rate of over 10%.
"Cost reduction, efficiency concerns & the need for strategic flexibility are driving BPO with renewed vigor," said Mike Fitzgerald, an industry analyst with Celent, a division of Oliver Wyman. "Carriers who are leading the way in this space are also looking at BPO as an avenue for process improvement and business transformation, and a shared business process utility is a good option for its combination of outsourcing and transformation."
About Exigen Capital
Exigen Capital is a Private Equity fund that invests to transform necessary but non-differentiating business functions into independent, profitable businesses; as well as in the technology and execution capabilities required to effect transformation. Its offices are located in San Francisco, New York, and Zurich, Switzerland.
For more information about Exigen Capital, please visit http://www.exigencapital.com.
Hollard is South Africa's largest independent and privately owned insurance company, with over $1B in Gross Written Premiums. Hollard is passionate about its people and its partnerships. The company has been doing business differently for twenty nine years. Today, 1 300 dedicated Hollardites provide both short-term and life insurance services to more than 6 million policyholders in South Africa, Australia, Pakistan, India, China, the UK, Botswana, Namibia and Mozambique.
For more information about Hollard, please visit http://www.hollard.co.za.
About Exigen Insurance Solutions
Exigen Insurance Solutions offers a completely modern, modular suite of end-to-end core solutions that provide insurers with measurable value and unparalleled speed to market. The Exigen Suite of configurable solutions for policy administration, claims, billing and distribution management can be implemented individually or together. Its comprehensive insurance functionality, innovative design and embedded capabilities across all solutions includes BPM, document generation, content management, CRM, business activity measurement and analytics.
For more information about Exigen Insurance Solutions, please visit http://www.exigeninsurance.com.
For further information, please contact:
Hollard Corporate Marketing & Communications
Tel: +2711 351 2072
Cell: +2782 494 0482
Hollard Media Relations Manager
Tel: 011 351-2022
Cell: 082 492 7713
Marketing Partner, Exigen Capital
Citigate Cunningham for Exigen Capital