Founded in 1980 and based in Hamilton, NJ, Medlogix is a premier provider of medical claims management solutions to leading auto insurance carriers, administrators for workers’ compensation and group health insurers. Leveraging its proprietary technology platform and deep clinical expertise, Medlogix offers a full suite of medical claims management services including pre-certification, independent medical exams, medical director review, medical bill and code review, and bill negotiation support as well as operates a proprietary PPO network in the northeastern United States.

Top Down Investment Thesis

Excellere’s investment in Medlogix is a result of the firm’s disciplined top down investment strategy, driven by several factors including i) rising medical costs driving an increase in auto and workers’ compensation claim severity, ii) persistence of improper billing and fraudulent claims within the auto and workers’ compensation industries, iii) carrier’s enhanced focus on effective loss prevention and cost containment solutions, and iv) growing utilization of outsourced service providers that improve efficiency and offer a quantifiable ROI.

According to the Insurance Research Council and National Insurance Crime Bureau, annual costs related to improper billing or fraudulent claims in the auto insurance and workers’ compensation industries are estimated to total up to $7.7 and $7.2 billion, respectively.  Despite a decline in claim frequency, since 2005 rising medical costs have driven an increase in claim severity (per claim cost) of 35.5% for bodily injury liability claims and 40.7% for workers’ compensation claims. Persistent claim fraud, rising medical costs and growth in claim severity are propelling the need for greater, more robust claims management and cost control measures among insurers and corporations; outsourced providers of medical claims management services offer an essential, highly effective loss containment solution. Medlogix’s medical claims management solutions and proprietary PPO network help carriers i) identify areas for cost savings tied to improper billing and limit leakage due to payment of fraudulent claims, ii) reduce administrative expenses associated with claims adjudication, and iii) lower medical treatment costs. Combined, the Company’s services deliver a more efficient and disciplined claims process, resulting in greater productivity and reduced severity for its customers.

Buy and Build Strategy

Medical claims management is a highly fragmented industry, which combined with continued trends in the outsourcing of non-core service functions by carriers, creates an attractive sector to employ a buy-and-build strategy. It is estimated that there are currently more than 500 outsourced medical claim service providers in the United States, the vast majority of which are regionally focused and family owned. Medlogix is focused on partnering with organizations known for service quality and excellence in complementary business lines and operating in favorable geographies.

To the extent you are interested in learning more about Medlogix, please contact Matt Hicks at , Ross Gundry at , or Nick Coleman at to discuss the medical claims management services sector further.

Personable Insurance (“Personable” or the “Company”) is an independent agent-driven, specialist non-standard auto insurance provider. Personable has partnerships with multiple insurance carriers and relationships with over 3,000 independent agents in California, Florida, Georgia and Texas. The Company plans to expand its capabilities further via the organic extension of its service offerings and acquisitions of additional non-standard auto assets and businesses in a number of key strategic states.

Top Down Investment Thesis

Excellere’s investment in Personable is a result of the firm’s disciplined top down investment strategy, and is driven by several factors including (i) the non-discretionary, critical nature of insurance products and services, ii) the highly-fragmented nature of the industry and iii) the opportunity to create a highly-compelling value proposition to carriers, distributors, service providers and insured companies and individuals (“insureds”).

The insurance products and services industry can be segmented into carriers, distributors (agencies and brokerages) and service providers. Carriers receive premiums for providing insurance coverage and typically assume the risks covered by the policy. Depending on a primary carrier’s risk preference, the actual risk may be offloaded to reinsurers who assume all or part of the risk associated with a particular policy. Agencies and brokerages serve as the distribution channel for carriers by selling policies to individuals and businesses, and in some instances rendering services such as underwriting, claims management and customer relations on behalf of their carrier partners. Finally, service providers supply both carriers and distributors with outsourced services and expertise in select areas in which a carrier or distributor may not maintain a core competency.

Gross premiums in the U.S. are expected to exceed $1.5 trillion in 2010/11, and with continued economic recovery, each segment of the insurance sector is poised for expansion at varying growth rates.

Buy and Build Strategy

The insurance sector is highly fragmented and comprised of over 3,000 U.S. carriers, 35,000 distributors and 5,000 service providers. This fragmentation, combined with the opportunity to significantly enhance its customers’ experiences and outcomes through the use of technology-driven automated systems, has created an opportunity to execute a customer-centric, buy-and-build strategy. Specific areas of focus within the insurance sector include: Managing general agents (“MGAs”) in non-standard auto or other niche segments, rural and independent agencies, and service providers (specifically TPAs, loss control / underwriting support, subrogation, data providers and software providers).

To learn more about Personable or the insurance products and services industry, please contact Brad Cornell at or Justin Unertl at .

ASI is a trusted advisor to the Federal Government, providing consulting services, productivity tools and training to over 56 clients within the Department of Defense, Homeland Security and Civilian agencies.

Top Down Investment Thesis

The dollar volume of Federal government purchases has grown by 63% over the past six years to approximately $425 billion (~8.5% growth). Meanwhile, the aging demographics of the federal workforce, high turnover among government employees and budgetary pressures have created greater demand for a trusted advisor to assist the Government in improving acquisition, program management and broader IT processes and outcomes.

Buy and Build Strategy

ASI is pursuing acquisition opportunities that will allow it to accelerate its geographic expansion into key markets (Huntsville, AL; San Diego, CA; etc.) as well as add additional differentiated service offerings for its clients within two general categories:Smaller,

  • Niche Service Providers – Government consulting and training companies that enhance and broaden ASI’s current service offering.
  • Divestitures – There is an excellent opportunity to acquire the divisions of larger, diversified companies that are compelled to divest their acquisition support business units to eliminate conflicts of interest.

To learn more about ASI, please contact Patrick O’Keefe at .