Insurance BPS provider Quindell Portfolio is shifting in its strategy to respond to the threat posed by self-service SaaS alternatives, by acquiring Bolton-based iSaaS Technology Limited (iSaaS), a SaaS provider focused on the medico-legal services markets.
Quindell is paying c£5.8m (38m shares and £1.3m in cash) to fund the deal. iSaaS is expected to generate turnover of £500k for the three months to 31 March 2013, and PBT of £400k. This makes iSaaS a highly profitable business right now, and helps explain why Quindell is paying a premium of c3x annualised revenue. The value also shows the competitive threat that SaaS alternatives like iSaaS pose to Quindell’s outsourced model. As we pointed out recently here, Quindell has been successful converting pilots to full outsourcing deals. But we are still waiting to hear bells ringing of the real biggies promised.
iSaaS’ core product is ePIsource Legal, which is a web-based medical rehabilitation option (MRO) case management system that provides access to over 1,000 specialists and treatment providers in the UK. iSaaS also provides Medical, Physio and Mediator modules to manage these aspects of a case. To date iSaaS claims have been used to file some 200,000 medical reports for its clients.
In our report General insurance opportunities in a rapidly changing market for TechMarketViews’ popular BusinessProcessViews research service, we pointed out this is an exciting time for IT/BPS providers targeting the general insurance vertical, driven by regulatory changes at both the EU and UK level, such as ‘LASPO’, which comes into effect on 1 April 2013. Quindell and competitors like Capita, The Innovation Group, Accenture, WNS and Xchanging, need to respond with new flexible offerings that respond to this changing environment.
Offering SaaS ‘self-service’ alternatives is one answer. We see these approaches encouraging the use of more hybrid delivery models, in time, such as SaaS/Business Process as-a-Service (BPaaS) that combine aspects of both self-service and outsourced processing capability on-demand.