Buckeye Insurance Group Branching Out Its IT Operations

"Insuresoft had rewritten to .NET and we were moving to the Insuresoft-based print solution," says Haines. "We also were moving from our homegrown Web portal back to the Diamond portal. It was a big year for us. We didn't look at doing a lot with Marias in that period."

The name Marias comes from a mountain pass in Montana's Glacier National Park. When the Great Northern Railroad was looking to get over the Rockies they found this pass, which they used to get over the Rockies.

"It's a place that's been special to me and my family," says Haines. "We wanted to pick [a name] that had meaning so we chose Marias Technology."

One area Marias is focusing on is working with small insurers to replace their legacy systems.

"We have had some prospects visit and all of them were smaller companies under $25 million that were financially strong, but they just knew that something was coming to an end," says Haines. "Either a programmer or a lead person on a homegrown system was near retirement, or they were not on the Web and couldn't do real-time processing, or they couldn't let customers make payments online."

Haines believes companies are beginning to spend more money on their technology after holding off as the economy suffered.

"They are deciding that if they are going to survive they are going to have to do something," he says. "If you are a $20 million company with 15-25 employees and very few if any in IT do you go buy a system that may call for you to have a CIO or some IT resources or do you go to someone like Marias where you can gain those efficiencies through someone else, pay less that what you would pay in salaries, and gain the expertise from us to help reach another level."

One target for Marias is companies operating on legacy systems or small insurers who have found themselves in over their heads when trying to modernize.

"These are still viable and profitable companies," he says. "They offer something to their niche. I would hate to see all of those types of companies get gobbled up and not exist anymore. We want these companies to get back to the business of insurance and out of the business of insurance technology. Some IT  projects can be overwhelming. There are companies out there that can't do things like policy download. They need help and those are the things [Marias] can do."

At the beginning of 2010, with its own IT projects stabilized, Buckeye decided to get some momentum going with Marias. The company doesn't focus strictly on insurers, serving non-insurers as well.

"We can offer both of them application hosting and Web hosting," says Haines. "We have a talented developer, but we don't want to do a lot of large-scale Web-development projects. We prefer to do things within our core competencies."

Buckeye has always done its own internal server work, points out Haines, and has never outsourced anything.

"We hosted for a few years some smaller insurance companies, but we thought we'd take it to a larger scale," he says. "Also, our big thing is our availability services offerings. We've always pushed to think about disaster recovery programs. On our most recent state audit we created a disaster recovery program for Buckeye. We think that's where we can help other companies."

Non-insurance companies, when they have business interruption coverage, may need to show their insurer they have a backup plan as well, points out Haines.

To create a backup center, Marias has taken over the previous Buckeye headquarters in Piqua, Ohio, and is making a large investment to finish up its availability services lab where PCs and phones are available. Haines estimates Marias could sell between 25 and 50 seats.

"We've taken steps to have redundant connections to the Internet from different types of providers, but the price is so much cheaper for newer connections," says Haines. "We have large fiber-cable connections and we back it up with a T1 and an Ethernet at the [backup] building."

Marias is focused mainly on the insurance side of technology and on companies under $200 million in written premium.

"We're interested in the NAMIC type companies we're familiar with," says Haines. "We understand things like how the day progresses for an insurance company. A lot of us do the same things that line up. That strengthens our offering to the insurance companies."

In addition to the hosting and availability services, Marias offers help with implementation services if the customer is moving.

"We have a lot of history in moving off a legacy system and moving to a client/server-based system," says Haines. That was a project that has helped us with other Diamond customers."

Marias also offers some BPO capabilities, but only to the level of printing and mail. "We're not doing data entry, but we actually have a couple of quotes out for some printing and mailing business," says Haines. "One of the companies is double the size of Buckeye, so that would be a nice customer for us."

Handling the mailroom may not seem like an IT job—and it isn't—but Haines reports his first management job at Buckeye was to oversee the mailroom.

"In the first week both people quit," he remembers. "I had paper coming out all over and trying to get stuff out. It taught me a lot and the mailroom [at Buckeye] still reports to IT, so I have an understanding of cost and efficiencies."

Marias has started slowly, but since word has gotten out, Haines claims to be on the phone non-stop talking with potential customers.

"As we find companies that need a system in addition to our services, we've been able to recommend them to Insuresoft and in return we're out jointly on quotes with [Insuresoft] to provide a subset of services," he says. "It's only been a few weeks but there has been a ton of activity. What we've also done is talk to other vendors that don't offer the same services, but with whom we have a good relationship. They are comfortable with us and know some of the things Buckeye has been able to accomplish. They are confident in recommending us to others and I think we are on the verge of some big things at this point."

Haines has not hired any Marias-specific employees, but he feels that is a good possibility for the future. He compares the process to another of his own avocations: volunteer firefighting.

"You get prepared for when everything goes to pieces, but not everything is a fire," he says. "We have capacity. In our mailroom we have two state-of-the-art printers, but we're done printing everyday by noon. We have built-in efficiencies, but if we take on three more printing customers we'll buy more [printers]. We have tried to be thorough. For the last few years we have thought through our business plan. We have thought out if one customer becomes four and then seven. How are we going to react to that? We're not going to get cute and be everything for everybody. We can provide total IT outsourcing for a company that is like Buckeye or a little bigger if that's what they want to do. If they want us to just print or just host, we can do that."

Robert Regis Hyle