Momentum shift

The development of AQS/advantage, a Web-centric policy administration system (PAS) for insurance companies, and a new marketing campaign have catapulted AQS Inc. back into the insurance solutions marketplace.
The Hartland-based company is celebrating its 25th anniversary while planning for an expansion, employee growth and the introduction of two new products.
"We have a great product that is garnering the attention and recommendations of leading industry analysts such as Celent Communications (Boston)," said Kevin Flanagan, president and chief executive officer. "There is a demand for what we do, and we are getting great response from the marketplace."
In 2002, AQS had 50 clients, a disk operating system (DOS) that was outdated and was losing money, he said.
Flanagan said it was suggested he take over the company in 2002 because of his business turnaround experience, but he was interested in AQS because of its loyal client base and the possibilities he saw for the future of the company’s PAS.
Flanagan brought in a new management team to develop and market the V3 Galileo. The V3 Galileo was a project that needed architectural improvement and became AQS/advantage in 2003.
"AQS contacted me saying that they were looking for a new president, someone with turnaround experience and effective, proven leadership skills," Flanagan said. "It seemed like an interesting challenge. Management was fractured, the product was in disarray, but AQS had long-term relationships with clients, quality solutions and the product had a strong architecture."
AQS/advantage began development shortly after Flanagan became CEO and marketed the first version in
November of 2003.
The general structure of the PAS program is not as innovative as the Web-centric feature, according to Eric Lien, vice president of marketing, but the system with the Web access feature puts AQS on the leading edge of policy administration systems.
"Web services have been around for years, but no one in the insurance industry had successfully implemented the idea yet," Lien said. "Web services greatly simplify the process of machine-to-machine communication between otherwise incompatible applications, and we have had nothing but positive input from analysts who have seen our products."
AQS/advantage creates a more personalized relationship between the business client and the insurance agent. Insurance agents can now act as industry resources instead of middlemen with the aid of the Web-centric feature. With just an Internet connection and a password, insurance carriers can make their entire databases available online through a secure private network.
When agents meet with clients, they can instantly enter the client’s information onto the database, access rates, gain approval, re-rate a company at any time, add assets and have answers without the wait.
"What used to take days or weeks can now be accomplished in minutes," Flanagan said. "Agents can now provide immediate rate quotes or answers to their clients’ questions, and in some cases, even issue the policy before the client walks out the door."
The product handles all business transactions via the Web and can accommodate a business or insurance carrier in every state across the country.
AQS/advantage is a licensed program that is customized to each client. According to Lien, a big challenge for AQS was establishing a new reputation in the marketplace as a progressive software solutions company for commercial lines.
"AQS was viewed by some in the industry as an old technology company," Lien said. "We wanted our message to reflect our actual capabilities, so we created new messaging, designed a new logo, launched a more informative and comprehensive Web site and re-branded the product as AQS/advantage."
With a new marketing plan, a new name for the product that was previously called V3 Galileo and seven clients signed on (six have used AQS’ services for at least 10 years), AQS is poised to continue its growth.
In 2003, AQS was awarded the Microsoft Gold Certification for the development of AQS/advantage using Microsoft’s .NET framework developer. The Gold Certification means that Microsoft believes the development and architecture of the program exceeds industry standards, Lien said.
AQS still works with its 39 other clients on different servers, not the AQS/advantage, according to Lien. With Flanagan’s takeover came a new appreciation and focus for customer satisfaction. Value-added employees in the client services department combined with the beginning of implementation for the V3 Galileo and the adaptation of the Terrorism Risk Insurance Act (TRIA) that guarantees terrorist-related claims will be paid, helped AQS to double its revenue from 2002 to 2003.
"We are trying to build something special here," Flanagan said. "We are all about growth here, as long as it’s measured, sustainable, and profitable to do so. We are looking to quintuple our revenue over the next eight years."
Lien said AQS plans to launch two new products at a trade show in New Orleans this November: an AQS/advantage version 2.0 which includes color screens and other updates; and a product called AQS/advantage Integrator.
The AQS/advantage Integrator allows communication between the AQS/advantage program and the billing system, claims system and any other system on the carrier’s enterprise software.
Lien said in the past, communicating between different departments was a long process with a lot of paperwork.
"AQS/advantage Integrator leverages Web services to publish AQS/advantage policy and statistical data and make it available to any of the carrier’s enterprise applications, such as their billing or claims systems"," Lien said. "This is a huge step forward based on the market feedback from industry analysts and leading carriers."
Although the implementation of AQS/advantage can cost in the seven-digit range, the system is saving insurance companies money by making the company more efficient, cutting down on paperwork and eliminating the need for a large staff of underwriters.
"Carriers are looking to drive down costs by reducing their overhead," Lien said. "AQS/advantage accomplishes this by giving the agents the ability to enter and receive policy quotes in real-time. This makes the agents happy because it gives them the ability to quote and issue policies more quickly, it also reduces carrier costs because it virtually eliminates the time spent on the phone answering questions or entering data for the agent."
AQS has also developed an application service provider (ASP) program for smaller insurance carriers. ASP allows the company to buy the ability to use AQS/advantage, but the program is run through a third-party host. Lien said it allows smaller companies to take full advantage of AQS’ product without the costs of overhead, the license and the hardware.
With the expected growth of the company and the commitment to customer satisfaction, Flanagan said AQS is rapidly adding staff and talking about moving to a new location in Hartland.
AQS’ current headquarters, located at 1325 Walnut Ridge Drive, Hartland, accommodates 188 employees. Flanagan said the company staff has grown to 180 employees, and he needs between 30 and 40 new employees by the end of the year to support his aggressive business plan.
Lien said AQS is currently studying its options of buying, leasing or building a new location.
"AQS doubled revenues in 2003, so as we continue our profitable growth in 2004 and expand, a high priority is to provide functional, state-of-the-art, high-tech workspaces for all our associates," Lien said. "This allows them to be very productive and helps AQS to deliver the highest quality product to our customers."
September 3, 2004, Small Business Times, Milwaukee, WI