Bitco, a software company set up by the Irish Brokers Association, is negotiating a possible joint venture with the South African company Maven to get new software into insurance brokers offices. Taking a joint venture partner is seen as the best option to fund the rollout of the software designed for the offices of general insurance brokers. But the Bitco directors can explore other options if suitable terms cannot be agreed with Maven, sources said.
The software has taken longer and cost more to develop than had been anticipated when Bitco was set up in 1999. The development so far has cost insurance brokers about £1.5 million.
IBA chief executive Mr Paul Carty expressed confidence that an agreement would be reached soon which would allow the technology rollout to begin within six to eight weeks.
He agreed that the project to develop state-of-the art technology compatible with the central system developed by the insurance companies has overrun on costs and on timescale.
But he said the system which brokers will have to buy from the joint venture company will improve their efficiency and reduce costs. Funded by about 230 members of the Irish Brokers Association, Bitco was set up to develop general insurance software suitable for brokers offices. Bitco contracted Maven to develop and adapt the software it required.
The brokers initially paid in some £4,000 each, raising over £920,000, to fund the development. This initial funding was used up before Christmas when an additional £440,000 was raised from members, according to Mr Carty.
Bitco has paid Maven a total of £680,000. Some £500,000 was paid for the rights to the Insight software, its adaptation for the Irish market and the embedding of Polaris software into the package.
An additional £180,000 was paid for the first year licence fee. The balance of the funds raised from insurance brokers has been used to fund Bitco's running costs since it was set up in May 1999. If a joint venture arrangement with Maven is agreed brokers will have to pay for the software based on the number of computer screens in their offices, Mr Carty explained.
The charges will be a once-off charge of about £900 per screen to acquire the system and an ongoing maintenance fee of about £480 per annum per screen, he said.
The new system, run in tandem with the INSE-COM software developed by the insurance companies, provides for full electronic data interchange between the insurers and the brokers.
Brokers will be able to take client details, asses the best product for that client, pass the details electronically to the insurance company and print out, for example, motor insurance certificates and discs once the business has been accepted by the company. Industry sources said the Bitco shareholders wanted to retain control over the software. But because more funding would be required to roll out the system they decided to seek a joint-venture arrangement.
