Represents Endorsement by Industry Leaders of Internet Processing for Property and Casualty Industry
NEW YORK AND WALNUT CREEK, CA, Nov. 6, 2000 — eStellarNet, the leader in automated transaction processing for the property and casualty industry, announced today that it has raised $30 million in a financing led by Capital Z Financial Services Fund II ("CZFII"), a global private equity fund focused on the financial services industry. Joining Capital Z in the investment is Insurance Services Office, Inc. (ISO), the nation's largest provider of actuarial and statistical information and services to the property and casualty insurance industry. Terms of the investment were not announced.
eStellarNet will use the capital to expand the reach and capabilities of its industry-leading, Internet-based connectivity system aimed at modernizing the $300 billion property and casualty industry's transaction processing infrastructure. Specifically, the Company will use the funds to accelerate the formation of connectivity partnerships with industry payers and provider networks.
"This investment, by two organizations with the efinance and insurance expertise of Capital Z and ISO, validates eStellarNet's leadership in bringing property and casualty transaction processing to the Internet," said John R. Stevens, eStellarNet's founder and chairman. "In order to remain competitive in today's technology-driven marketplace, all insurers will need to incorporate efficient electronic connectivity into their value chain. eStellarNet is the only e-business intermediary that is offering property and casualty insurers a total end-to-end connectivity solution today that allows them to reduce expenses significantly."
"When insurers see that they can cut expenses by 40% and improve processing speed by 80%, it gets their attention," said Arnold Silvestri, president and CEO of eStellarNet. "eStellarNet is already delivering results for those companies that have adopted our technology. We and our investors believe large-scale industry adoption of the eStellarNet transaction hub, as a universal processing platform, is the ideal strategy to combat rising unallocated loss adjustment expense and bolster operating performance."
Bradley E. Cooper, a partner of Capital Z Partners, which manages CZFII, commented: "As leading efinance investors with particular expertise in insurance, Capital Z knows that the Internet presents a tremendous opportunity for property and casualty insurers to revolutionize and dramatically improve the way they do business. eStellarNet's Internet platform is the first of its kind, and we see the Company as the obvious leader in a significant market that is ripe for the technology that they have developed."
"ISO is investing in eStellarNet because its services provide our property and casualty insurance customers a concrete way to achieve real efficiency gains in automobile and workers compensation insurance," said Frank J. Coyne, ISO's president and chief executive officer. "eStellarNet complements ISO's other initiatives to assist the property and casualty industry achieve improved financial results."
eStellarNet offers, on an Applications Service Provider basis, an integrated suite of products that revolutionize how workers compensation, auto and disability insurers interact and communicate with providers and bill reviewers. Using the Internet, the Company's products facilitate the exchange of information among the front-end enterprise claims processing systems of payers, providers and bill review companies, eliminating the use of phone, fax and mail throughout all steps of the claims processing cycle from submission to payment, as well as eliminating manual data entry.
The Company's products also allow for the electronic submission and matching of medical bills and all forms of medical attachments, online claim number retrieval and verification, online payment status inquiry, and electronic payment of claims with automated electronic remittance advice and explanations of benefits. In addition, the Company's proprietary edit-engine automatically pre-processes all submitted bills, ensuring that clients receive only accurate, complete information. eStellarNet also helps insurers reduce claims cycle time and provides significant savings to all participants in the claims process.
eStellarNet is the first e-business intermediary offering the property and casualty industry a total end-to-end connectivity solution — linking property and casualty insurers with major occupational medical provider organizations and national bill review companies. The Company's e-network of occupational medical providers is the largest in the United States, and the Company continues to expand its nationwide base of connected providers. In addition, eStellarNet has partnered with the majority of the nation's largest bill review companies to offer a completely integrated solution to its clients.
The Company's products integrate with any claim or practice management system, comply with proposed government security standards, such as those in the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and feature simple user access to insurers and providers.
About Capital Z
Based in New York, Capital Z Financial Services Fund II, LP (CZF II) is a $1.85 billion global private equity fund that focuses exclusively on investments in traditional and online financial services companies. CZF II, which was formed in August 1998, is managed by Capital Z Partners (www.capitalz.com), a global alternative asset management firm headquartered in New York City, with offices in London and Hong Kong. Capital Z Partners also manages Capital Z Investments, L. P., a $1.5 billion fund, which focuses exclusively on investments in private equity funds, hedge funds and other alternative investment vehicles. Since 1990, Capital Z and its predecessor funds have invested approximately $1.9 billion in 75 transactions.
About eStellarNet, Inc.
eStellarNet, Inc. has been the leader in providing intelligent connectivity solutions for the workers' compensation and integrated disability management industries since 1987. The Walnut Creek, CA-based company now offers a comprehensive set of proprietary Internet applications that revolutionize workers compensation claims processing, auto and liability medical and disability insurance bill processing.
ISO is a leading source of information, products and services related to property and liability risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides statistical, actuarial, underwriting and claims information and analyses; consulting and technical services; policy language; and information about specific locations. In the United States and around the world, ISO serves insurers and reinsurers, as well as agents, brokers, self-insureds, risk managers, insurance regulators, and other government agencies.
Steve Stevens (eStellarNet)
Eric Berman (Kekst and Company) For Capital Z