Magnolia Insurance Signs $114 Million BPO Services Contract with CGI
ANDOVER, Mass., 14 May 2008 - Start-up insurance carrier Magnolia Insurance Company has signed a $114 million agreement with CGI Group Inc.
The ten-year contract calls for CGI to provide Magnolia with complete back-office services, including policy administration, billing and accounting, claims administration, statistical reporting, and statutory accounting. Magnolia will begin with an assumption of a book of homeowner's policies from Citizens Property Insurance Corporation in Florida and will begin writing new policies by September.
"We're excited about this opportunity," James Irl, President and CEO of Magnolia explained, "Magnolia will partner with CGI to use cutting edge technology to lower costs and improve our communications with our agents and policyholders. Using CGI's technology and experienced staff, we expect to be very competitive in the Florida Homeowners market. Magnolia made this decision based on CGI's full-range of capabilities and their track record of success in ventures of this type." He added, "CGI's partnership approach makes it easy to do business with them and provides us the flexibility to support the changing needs of our clients and to expand into new markets quickly."
Paul Raymond, Senior Vice-President of CGI's New England and Insurance Services business unit, added: "Magnolia is filling a need in Florida's insurance market. CGI is committed to providing quality services to their agents and policyholders. Magnolia benefits from CGI's ability to provide small- to medium-size insurance companies, with the technology and service capabilities they traditionally wouldn't be able to create on their own."
Magnolia launched its operations in 2008 with an initial investment of $20 million in surplus funds. That capital commitment allowed Magnolia to assume 60,000 policies from Citizens Property Insurance Corporation and to write new Florida homeowners policies in that market.
CGI Group Inc. and its affiliated companies employ approximately 27,000 professionals. The firm provides end-to-end consulting, IT, and business process services to clients worldwide from offices in Canada, the US, Europe, Asia Pacific and from centers of excellence in North America, Europe and India. According to CGI, its annual revenue run is $3.8 billion, with a 31-March-2008 order backlog of $12.04 billion.