Source Software

Origins

Source Software Limited was originally established in 1993 in response to the growing demand for facilities to enable non-specialist financial intermediaries such as IFAs, Life & Pensions representatives and mortgage brokers to cross-sell general insurance products to their clients. The company initially offered a single household insurance product, but quickly realised that by consolidating the home insurance sales generated by these small intermediaries, it could deliver levels of commission for the introducer comparable with those they would receive if they held a small direct agency with the Insurer. However, unlike holding a direct agency, there was no minimum business volume for them to sustain and much less administration. The firm could also offer a better deal for the consumer than if they took out the insurance offered by the mortgage lender. The business then started to focus on the contribution that IT could make to this process, in particular with respect to allowing the brokers to efficiently offer a range of competitive quotes.

Success Factor

The firm has endeavoured to make "The Source" software as user-friendly as possible and to make it the most cost-effective channel for financial intermediaries to cross-sell general insurance. As a result, Source Software enjoys high levels of customer satisfaction with the software. The business has excellent "word of mouth" resulting in high levels of referral and has been effective in structuring its marketing activities such that it has enjoyed a steady rate of month on month increase in its user base since launch. Favourable sales policies for new business introduced has meant the firm has experienced excellent retention rates and therefore cumulative revenue growth from each existing user as well as a healthy rate of ongoing growth in new users.

The Future

Having gained a clear market advantage in service levels by automating fulfilment, the firm has now embarked on plans to increase distribution by linking its backoffice systems into alternative point of sale mechanisms in the mortgage market. The first of these deals were finalised in Summer 2003 with Mortgage 2000 and Trigold (who together account for over 60% of the intermediary mortgage sourcing software market). This approach will enable Source Software to operate in a range of sub-channels that it does not currently have access to. The creation and marketing of transactional websites (both branded and white labelled) will be further cornerstones of this strategy. In particular, Source Software anticipates high demand for compliance services for mortgage, general insurance & life assurance advisers post FSA regulation in January 2005. With regard to strategic alliances, the company aims to become the preferred general insurance and term principal for a significant proportion of the mortgage networks that already currently exist as well as many of the anticipated new entrants.