Cypress Property & Casualty Grows from Startup to Regional Carrier with CSC’s BPO Services

The 1990s were a low point for the homeowners insurance market in Florida. In the wake of Hurricane Andrew, 11 insurers declared bankruptcy and most major carriers quit writing business in the state. The state-sponsored Joint Underwriting Association (JUA) was holding nearly 1 million policies for residents of coastal areas, with $98 billion in potential liability.

In 1998, a group of investors in Jacksonville formed Cypress Property & Casualty Insurance, which took out thousands of policies from the Florida JUA and worked with CSC to form a virtual insurance company — a business model in which the only full-time employees are the management team and all other activities are outsourced. In the decade since, Cypress has expanded into the Texas homeowners market and managed to survive Florida’s devastating hurricanes.

“CSC had a business model that nobody else offered,” said Phil Dragotto, vice president of Information Systems for Cypress Insurance. “It allowed investors to quickly get into the Florida insurance market without having the infrastructure of a typical insurance company. And the whole model of BPO is driven by variable cost. It lets us flex with the business as a variable cost so we don’t have to deal with fixed costs.”

BPO — ‘Our Face to the Insured’

CSC’s BPO operations provided full back-office support for Cypress including call center, billing, accounting, reporting and compliance. Behind the scenes, CSC’s property and casualty BPO operation uses CSC’s POINT IN software, the leading policy administration system for mid-sized companies. CSC’s underwriting team reviews all new applications based on rates and formulas provided by Cypress.

“CSC has really been our face to the insured,” Dragotto said. “CSC’s BPO team does an excellent job of branding itself as Cypress.”

A True Collaboration

“CSC brings a lot of business insight as well as technical resources to the table,” Dragotto said.

That level of collaboration was evident in the introduction of a monthly pay plan to Cypress policyholders. CSC’s BPO team worked with Cypress on a project to interface its administration system with its lockbox vendor to accept monthly bank draft payments, which are automatically updated in the billing system. Offering policyholders the ability to enroll in the monthly pay plan gave Cypress a key competitive advantage.

One-Stop Shopping

Cypress licensed CSC’s Agency Link Electronic Edition software to enable real-time information exchange between the company's point-of-sale system and POINT IN. Cypress also chose CSC’s Advanced Claims soft ware to integrate claims data from a third-party claims administrator. According to Dragotto, one of the key benefits of the relationship between Cypress and CSC is “one-stop shopping.”

“We routinely look at what other companies have to offer,” he said. “You’ll find a software vendor out there, but you have to go to somebody else for your print solution. When there’s somebody with print and software, they don’t do back office. You have to find somebody else for customer service. What we learned is that there is nobody who actually provides the end-to-end solution like CSC.”

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