Passing of the baton
New CEO of Applied Systems brings an outsider's perspective to insurance technology
By Nancy Doucette
Agency owners who are seeking producers are often advised to hire
for a particular talent, not necessarily insurance knowledge. Private equity
firm Bain Capital, owner of software provider Applied Systems, Inc., followed a
similar approach when seeking a new CEO for the University Park, Illinois-based
Just days before last September's TENCon 2011—the annual
training conference for users of Applied Systems' products—news about
Reid French began to circulate. French would replace James P. Kellner, an
Applied Systems veteran, who had served as chairman and CEO since 1998. In a
press release, Kellner said, "After nearly 26 years at Applied Systems, I am
ready to pass the leadership baton so I can move into a role where I can help
the company grow in new ways."
At the TENCon opening general session, Kellner introduced
French—a former strategic planner for Disney and most recently chief
operating officer of Intergraph Corporation, a global company that provides
public safety software among its offerings. As French introduced himself to
those in attendance, he acknowledged that it was only his seventh day with
Applied Systems. Without missing a beat, he launched into a comfortable
discussion of Applied's use of "cloud" computing and how it represents the
future of software deployment.
In the months between then and when Rough
Notes had the opportunity to speak with Reid French about his plans for
Applied Systems, he says he's spent a great deal of time on the road, meeting
agents and brokers, and listening. "I wanted to hear directly from our
customers whether we're doing a good job of supporting them," French says. "I
want to find out what Applied Systems is doing right and where we have areas
for improvement. It's a great opportunity for us to understand how we can
improve as an entity.
"I'm new to insurance," he admits. However, being "outside"
insurance, but "inside" technology, could be the basis for innovation.
"Some of the best ideas often come from outside one's own
industry," he points out. "Everyone forgets that the mouse wasn't invented by
Apple or Microsoft. It wasn't developed for a PC originally, but it was a great
innovation that changed how people interact with a computer. We need to be open
to looking at what other industries are doing in the technology arena."
Big picture perspective
French says he's created a couple of new positions on his
executive team—one of which will have a lot to do with Applied's openness
to looking at other software company offerings that could enhance the
experience for Applied's agent and broker customers.
In mid-October, Ryan Hobbs was named senior vice president of
corporate development. "Corporate development means a lot of different things,"
French says. "For us it means strategy—forward thinking as to where we're
going, as well as M&A—acquisitions of companies. I worked with Ryan
for a number of years at Intergraph. He understands software companies and how
to add value to a customer base.
"Acquisitions can be a meaningful and important part of a
software company's growth trajectory," French continues. "Applied Systems
intends to do a little bit more on the acquisition front than we've done in the
past. About this time last year, we acquired Artizan Internet Services. That
acquisition was in the strike zone of where we want to take the company.
Consumers want to produce and manage certificates and other insurance-related
documents via an online, password-protected portal. Artizan's CSR24 delivers
French provides quick reassurance that Applied isn't going to
move away from its history of innovation. "You're going to see us double down
on that," he declares. "We're an innovative product company." And without
tipping his hand too much, he says there will be more developments in the area
of mobile capabilities—enabling insurance professionals in the field to
access the "rich information that's in an agency management system."
He says his 20 years in the technology field combined with his
stint at Disney provided him with a solid foundation for his current
responsibilities. "Disney is absolutely focused on
continual improvement," he points out. "They evaluate every interaction they
have with their customers to determine how they can make that interaction
better. And if a customer has a poor experience, Disney wants to make sure it
doesn't happen again.
"I'm a big believer in continual improvement," French explains.
"We need to always monitor our interactions with our customers. Where we've had
success, we want to make it better—success plus. And where we haven't met
customer expectations, we want to remedy that. Every year we want to try to
make it a little bit better."
He says Applied is making significant investments in order to
upgrade the capacity of its data centers for its online users—to create
even better redundancy and throughput.
In terms of training and consulting, he says, "We're in 'invest
mode'—in terms of people and resources. Applied will be responding to
customer requests for more productivity consulting." This dovetails nicely with
offerings from ASCnet (Applied Systems Client Network), whose annual training
event, TENCon, delivers in the neighborhood of 150 sessions to help members get
more from their management system and technology in general.
In early November, French named Ian Hoffman as chief marketing
officer to "help build Applied's brand and increase awareness with its
customers and beyond. We want to make sure people understand who we are and
what we stand for." Like Ryan Hobbs, Hoffman is an alum of
Intergraph—which had an office presence in more than 40 countries during
his tenure there. He was responsible for Intergraph's global marketing
"Insurance is a large industry," French notes. "The European
insurance market is as big as the North American insurance market. The Japanese
insurance market is a bit smaller than the North American, but not by much.
Don't run to the extreme with what I'm going to say here," he adds with a
smile, "but Applied Systems has a great opportunity to take our applications to
other countries and operate as more of a global enterprise. I'd like to see us
execute behind that over the next 5 to 10 years.
"We've succeeded in the U.S. and Canada," he states. "There's no
reason why we can't succeed in other Commonwealth countries—like
Australia, New Zealand, the U.K., etc. Those are areas where you'll see us push
French acknowledges there are still ample growth opportunities
state-side; for instance, offering products such as CSR24 to existing
customers, converting TAM customers to Epic, or migrating LAN customers to an
During conversations with agents and brokers, French says he
encountered essentially two groups. One truly embraces technology and tries to
figure out how to use it to make their businesses more profitable and more
efficient. The other group harbors the belief that technology is a
disintermediator—creating a chasm between the agency and its customers.
"Further automation between the agency and the consumer is
nothing but good for independent agents," French asserts. "Over the next
decade, the insurance industry will adopt more 'self-service' technology to
enable consumers to complete transactions—the production of certificates,
the ability to obtain pricing, the ability to retrieve policies online rather
than through the mail. It's not going to disintermediate the agent. The value
of the agent isn't in the transaction. The value of independent agents is in
the advice they offer.
"The reality is that greater adoption of technology refocuses the
independent agent on what he or she does best: helping people at their worst
moments … when there's a crisis."
French concludes: "Part of the reason why I joined Applied
Systems is because I saw insurance as a field where there is tremendous
opportunity to bring more automation. It's going to be exciting to see how it
turns out over the next decade."
For more information:
Applied Systems, Inc.
Web site: www.appliedsystems.com