FINEOS Corporation Holdings Plc (ASX: FCL) is engaged in the research, development, marketing & supply of software products for the LA&H or life, accident and health insurance industry with 7 of the 10 largest group life and health carriers in the US plus 6 of the 10 largest life and health carriers in Australia. The company also has various multi-line insurers in Ireland, the UK and Northern Europe along with 100% of the New Zealand accident claims market.
FINEOS has employees and offices across the world, which supports it to scale up at a faster rate. Moreover, 48 clients in 8 nations are using the software of FCL. The company’s growth is expected to be driven by an increase in the adoption of current modules & cross-selling new modules within the present client base, new client acquisition followed by its increasing footprint in the key strategic markets.
The company was founded in the year 1993 and is passionate about technology, product innovation and client service. FCL aims to assist its insurance clients care for the people they serve by providing them with superior technology.
The company has built a modern core platform for the life, accident and health insurance industry and through this platform, FINEOS Corporation aims to become the global market leader in core systems for the group along with voluntary and individual insurance.
About FINEOS Platform and the key Products:
The FINEOS Platform is the company’s end-to-end, module-based core system solution which is designed & delivered through the cloud as a SaaS solution. FINEOS platform includes of the following:
- FINEOS AdminSuite: This product of FINEOS is designed in a way to help the core administrative processes of an insurer. The modules within FINEOS AdminSuite can be implemented individually or as a complete solution across the following products -
- FINEOS Claims
- FINEOS Payments
- FINEOS Provider
- FINEOS Absence
- FINEOS Policy
- FINEOS Billing
- FINEOS Engage: This product helps the insurers to connect digitally in real time with customers, businesses & technology partners beyond their organisation.
- FINEOS Insight: This product of FINEOS possess data analytics capabilities which enables clients to evaluate as well as submit data in a more effective way.
FINEOS Signs Tier 1 U.S. Insurance Carrier as New Customer:
As highlighted above in the article as well as in the company’s prospectus, FCL’s growth depends on the adoption of current modules and cross-selling new modules within the existing client base followed by the acquisition of new clients and its expansion in a key strategic market. And on this front, the company has signed a new five-year (initial) license agreement with a Tier 1 U.S. Insurer for the FINEOS Platform to assist Integrated Disability and Absence Management (IDAM) in the cloud for their Employee Benefits division.
The revenue related to this agreement for FY2020 has been included in the current projections that were provided to the market on 16 December 2019.
FINEOS CEO Michael Kelly stated that the company is delighted that it’s platform is being selected by leading multi-national insurance carrier to support their Employee Benefits. He also said that by the implementation of FINEOS Platform in support of their IDAM requirements, FCL’s new client would be firmly placed to help employers as well as employees & also guarantee that they can keep pace with upcoming improvements in technology & regulatory amendments.
With the signing of this agreement, FINEOS has further strengthened its position in the US, where the number increased to 7 out of the top 10 group life and health carriers.
A Glance at the Q2 FY2020 Cash Flows:
On 31 December 2020, FCL released its Q2 FY2020 cash flow details, as mentioned below for the quarter ended 31 December 2019.
- Cash receipts during Q2 FY2020 was €16.599 million while for 1H FY2020 was €32.865 million.
- Net cash used in the operating activities was €1.911 million while for six months ended 31 December 2019, it was €5.466 million.
- Net cash used in the Investing activities was €4.120 million while for six months ended 31 December 2019, it was €5.466 million.
- Net cash from the financing activities was €0.047 million while for six months to 31 December 2019 was €40.266 million.
- Cash and cash equivalents position of the company by 31 December 2019 was noted at €34.712 million.
- The expected cash outflows for Q3 FY2020 it €23.203 million.
FINEOS Revenue Generation medium:
FINEOS generates revenue by selling its software products against a fee and the provision of professional services related to those products in the form of service revenue.
FCL shares have delivered a YTD return of 21.21%. The company’s announcement released on 3 February 2020 had a positive impact on its shares price. The shares on 3 February 2020 closed at $3.2, up 2.564% from its previous close.
However, since 4 February 2019, FCL shares are under the trading halt pursuant to ASX Listing Rule 17.1. The trading halt requested by FINEOS is related to the potential update following its announcement lodged with ASX on 3 February 2020.
The Company anticipates the trading halt to last until it makes a further announcement to ASX, which it expects would be announced before the beginning of trading on 5 February 2020.
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