Insurance software solutions provider FirstBest Systems (Bedford, Mass.) has completed a new round of funding, with contributors to $10 million of growth financing including NewSpring Capital and Verisk Analytics, in addition to earlier supporter Brookstone Partners.
Investors' confidence in FirstBest's prospects reflects the company's continuing success, which is reflected in a 125 percent year-over-year growth in orders and a 40 percent staffing increase during the last year, according to a statement by the vendor. It also reflects insurers' conviction in the critical role of front-office solutions and underwriting automation, in the view of Deb Smallwood, founder of strategic advisory firm Strategy Meets Action (SMA, Boston).
"Technology investments in underwriting automation are paying real dividends and effectively positioning insurers for differentiation and competitive advantage," Smallwood elaborates. "Insurers are embracing the capabilities that are offered by FirstBest. This is an indication of the momentum and the maturity in automating underwriting processes and decisioning."
When FirstBest arrived on the scene it was seeking to solve what CEO John Belizaire characterizes as a "very focused problem," namely that of automating the underwriting decision-making process.
"As we spent time in the insurance industry, we found a bigger opportunity, which is the front office, looking at all the systems and interactions of the carrier with its distribution force and field operations, and creating a platform to power that effort," Belizaire says. "Our vision is where we provide the key software capability that powers the way an insurance company sells, markets and prices insurance products."
Belizaire notes that the vendor's growth financing will fund its expansion from commercial lines into the London market, as well as into life and health, particularly group health, as well as complex personal lines, such as policies sold to high-net-worth individuals. FirstBest also plans to expand geographically into the U.K. and Europe.
NewSpring Capital managing partner Michael A. DiPiano comments that FirstBest offers the investor "a winning combination for a growth equity investment: proven and smart management, a growing roster of enterprise customers, and, of course, a unique and timely offering." DiPiano adds, "the insurance sector continues to embrace the FirstBest Front Office Suite because it's a true solution for unifying and streamlining a business function that's core to the bottom line: underwriting."
Matthew Josefowicz, partner and managing director, Novarica (New York), characterizes the financing round as a good example of the increased level of venture capital and private-equity interest in the insurance technology space.
"NewSpring is also an investor in iPipeline, so they appear to be bullish on technology's role in transforming insurance distribution," Josefowicz comments. "It's also interesting to see Verisk getting closer to the insurance enterprise software sector again, but as an investor and partner this time."