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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 firm.

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 that."

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 strategy.

"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 forward."

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 online environment.

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:


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