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Barnstable Mutual Does More With Less Using IDP Outsourcing

Software and hosted systems from IDP allow 12-employee Barnstable to expand services.

Barnstable County Mutual Insurance Company recently announced its plan to move all lines of business to the latest .net version of Insurasphere from insurance software provider Insurance Data Processing Inc. (IDP). This move stems from the company’s decision to outsource IT duties so it can better focus on improving and expanding business.

Barnstable Mutual sells homeowners, renters, and personal liability insurance through 26 independent agents on Cape Cod and the South Coast of Massachusetts. Given its small workforce, exclusive niche, and 17,000 policyholders, the decision to outsource was logical.

“Our focus, with 12 employees, is on making sure we’re placing value in the most value-added activities in our business,” says John DeMello, CEO and president of Barnstable Mutual. Service, not cost, was the primary factor in the company’s decision to outsource.

[ Read: State Farm Sees Opportunity in Home Monitoring. ]

Risk management and disaster recovery were also key determinants. Being on Cape Cod, there is a constant risk that storms or natural disasters could interfere with office access. “Virtually nothing from a data or application perspective resides at our physical location” DeMello says, which improves the disaster recovery process.

For outsourcing, Barnstable chose SaaS platform Insurasphere, an Internet-based insurance enterprise system that handles business IT functions including policy administration, claims, billing, agency management, and bureau reporting. The vendor of that platform, IDP, also handles agency downloads, delivery of mortgage policies and billing reports, internal network monitoring, and maintenance of the document management system for Barnstable.

As a result of outsourcing, Barnstable benefits from remote access, high-speed system functions, and easy integration with Barnstable’s other platforms and document management system. Its agencies save time normally spent on policy production, distribution, and mailing. The system is fully integrated into the company website and portals for agents and policyholders.

With the time freed up by Insurasphere, Barnstable has entered the excess and surplus line market with the creation of a subsidiary company. IDP plays a role in this venture and was quick to adapt to writing surplus lines and generating the necessary forms, says DeMello. The formation of an E&S company allowed the company to bring more capital to their agencies.

Barnstable doesn't see itself on the vanguard of an outsourcing revolution among insurers, however. “It depends on the size of the company” whether or not they consider the practice, DeMello says. Larger businesses normally have internal processes that handle IT, he explains, but outsourcing is critical for companies that want to carve out a niche in the market.

Kelly Sheridan is an associate editor for Insurance & Technology. Prior to joining InformationWeek Financial Services, she was a staff writer for InformationWeek and InformationWeek Education. Kelly has also written for trade publication Promo Marketing and a number of ... View Full Bio

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Becca L
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Becca L,
User Rank: Author
12/9/2013 | 3:20:30 PM
re: Barnstable Mutual Does More With Less Using IDP Outsourcing
Especially working in Cape Cod, as they pointed out, there is more than
enough to keep them busy weather and disaster-related wise. While their
competitors are pulling resources to access their data, Barnstable can
carry on. This particular barrier to offering a competitive year-round service has been eliminated, and it becomes a less-excusable attribute of their competitors.
Kelly22
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Kelly22,
User Rank: Author
12/9/2013 | 2:01:13 PM
re: Barnstable Mutual Does More With Less Using IDP Outsourcing
Going into the future, it will be interesting to see how outsourcing grows as a trend - and how older companies react. I feel like this could easily become popular among smaller insurers like Barnstable. By expanding their business with only 12 employees, they've already proven that their strategy improves efficiency.
KBurger
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KBurger,
User Rank: Author
12/9/2013 | 2:33:47 AM
re: Barnstable Mutual Does More With Less Using IDP Outsourcing
My thoughts exactly. While there obviously are economic considerations to Barnstable's approach (probably mainly around avoiding hiring more staff) what is striking about the company's strategy is how it has enabled rapid entrance into new markets/lines of business -- adding competitive advantage to a company that probably is dwarfed in terms of resources by a number of other companies in its markets.
Nathan Golia
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Nathan Golia,
User Rank: Author
12/6/2013 | 9:32:00 PM
re: Barnstable Mutual Does More With Less Using IDP Outsourcing
DeMello's last point is very perceptive Gă÷ cloud and as-a-service solutions lower the cost to entry into the insurance market for new companies. When you don't have to worry about getting a mainframe and loading it up with software, you can focus on whatever niche area of the market you're trying to improve Gă÷ which puts pressure on older companies whose weaknesses you're ostensibly attacking.
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