New Jersey-based Nekema Inc. and Ohio-based Insure-Point.com Inc. finished up plans to merge before the end of the year. Company officials recently announced that the newly combined company will operate under the Nekema name and will be based out of Jersey City, N.J.
John Rhodes, CEO of Nekema, pointed out that the merger shows that two companies can come together and form a common ground.
“California is the biggest market that we’re operating in,” Rhodes said. “We’re very active due to all the issues there. New York, the Middle Atlantic Region and, of course, Florida are big. And Texas is emerging.
“The merger demonstrates to the industry that two major carriers can collaborate and invest in a common technology platform,” Rhodes continued. “Secondly, InsurePoint had a number of features that Nekema didn’t and vice-versa. Finally, with our combined capabilities, we represent part of the second generation of insurance e-commerce. There was a first generation, a lot of earlier carrier systems that didn’t work out as well for a whole bunch of reasons. I think the market is ready for a second generation of serious players.”
InsurePoint.com was founded in 1996 by Bolton & Company in Pasadena, Calif., and Atlantic Mutual Companies of New York. Established in 1931, Bolton & Company has grown to become one of the largest privately held insurance brokers in the U.S., currently placing in excess of $100,000,000 in premiums on behalf of its clients. Services include comercial insurance, employee benefits, risk management and human resou-rces administration. In addition to the insurance licenses it holds in 50 states, the company is a partner member of Assurex International.
Asked about the merger, Jim Bolton, a director of Nekema, commented that “an independent insurance agent will be able to go to a computer and access Nekema/InsurePoint through the Internet, put in a simplified application, then send that to InsurePoint and route it to the four or five carriers we’d have signed up to quote small business. The risk would be scrubbed through different computer systems and make sure they’re legitimate. If everything is acceptable to each company, the quote would be returned to the agent within three to five minutes. The quotes will be lined up on a proposal screen with each company listed and their price for risk. You can select one of the companies, and then the policy would be issued in under 10 minutes and in the mail that day. It takes a lot of the overhead and reduces the time. We have two companies signed up right now, with several more waiting.”
Nekema, founded in 1999 by the Kemper Insurance Companies of Long Grove, Ill., and the Madison Consulting Group of Jersey City, is a business-to-business, e-commerce platform for property/casualty insurance agencies and carriers. Its services include the InsurePoint.com commercial lines competitive market place, the Nekema Personal Lines competitive market place and a variety of proprietary and private label implementations. Nekema’s market place and proprietary systems are in more than 1,400 agency locations in 45 states and the District of Columbia, with more than 10,000 authorized professional users. Products include small commercial BOP; workers’ compensation; commercial auto and umbrella; personal auto, homeowners and personal umbrella; and specialty coverages.
Nekema’s systems include features such as online new business applications, underwriting and appetite guidelines, quoting, binding, renewals, endorsements, referrals, and agency and carrier work flow support.
According to Rhodes, Nekema made the first move in the talks between the two companies.
“There is obviously a lot of consolidation going on—far too many companies for the market,” Rhodes said. “We were talking to a number of people and began talking to them in the spring. We found there was a very good cultural fit in the companies and between the parents.”
Rhodes said the move will not impact employees as far as adding on or contraction.
“We will be growing very vigorously in the New Year,” Rhodes stated. “Our goals are to make a success of the InsurePoint commercial lines platform, and we also are planning to continue to expand our private labels business quite significantly.”
Bolton noted that the benefit to Bolton & Company, a minor stockholder, will be in reducing—like any other independent agent—the overhead and funneling it to just a few companies. “The whole process will be streamlined. Nekema intends to contact agents all across the country to sign up. Agents can reduce their overhead and do their client a much bigger service.”
Rhodes backed that up by adding, “Agents can use a single application to get to multiple carriers. The technology allows us to evaluate the application as they are going in. This is the fastest and most efficient application process to benefit the agent.”
Rhodes adds that the greatest challenge in keeping up with on-going technology is “to make sure the technology fits the way business really gets done. It’s a question of fitting the technology to the way agents work. The technology also has to help the agent communicate with their markets.”
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