Robin Raina, President and Chief Executive Officer of Ebix Inc. (EBIX): a Wall Street Transcript Interview

Wall Street Transcript

67 WALL STREET, New York - October 13, 2012 - The Wall Street Transcript has just published its Internet Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increased Mobile Content Traffic - Chinese Online Monetization Trends - Internet Infrastructure and Services Consolidation - Enterprise Adoption of Cloud Computing - Social Networking Economics

Companies include: Ebix Inc. (EBIX) and many others.

In the following excerpt from the Internet Services Report, the CEO of Ebix discusses the outlook for his company for investors:

TWST: Please start with a background summary on Ebix, including thoughts from your experience and perspective on the company, and then bring us up to date and describe what you see as the business and company today.

Mr. Raina: Well, as you know, Ebix is a fairly old company, and we're born in 1976. We've been traded on the Nasdaq for a few decades now. The company's prime business is providing on-demand services to the insurance community. We cater to all the different entities involved in insurance.

Our main business is setting up exchanges, making data flow through, removing paper out of the process, and as a part of while doing that, we had shown a degree at a superhighway, whereby data can move seamlessly from one end to another.

And the entire goal of the business is to, while removing paper, improve efficiency, improve the margin of insurance companies, brokers, banks and so on. So I think that's a high-level summary of the company.

TWST: What were Ebix's revenues and earnings in the latest quarter reported?

Mr. Raina: I believe the revenues reported were $47.7 million, and earnings were approximately, I think, $0.46 or $0.47.

TWST: Please turn to the company's on-demand and back-end carrier systems, the EbixAdvantage and EbixAdvantage Web, for a moment. Would you elaborate on the underlying goals there, the service features, benefits and then other products the company brings to the market? ROI seems to be key in today's environment.

Mr. Raina: Well, the products that you specifically asked about constitute a very small percentage of revenue of Ebix, meaning those are back-end carrier systems that we provide. Those are SaaS-based insurance company systems, the EbixAdvantage and EbixAdvantage Web, and all those systems do, they are available on an on-demand basis, on a SaaS basis. An insurance company can run its entire business using those systems. They can have a general ledger of their policy admin, their sales administration, their reinsurance, claims administration, virtually anything that an insurance company needs to run its business can be done on that. But that's a fairly small portion of the company. Exchanges are our main business today.

TWST: Who do you see as the company's customer or client base today? And how do you see that changing or evolving?

Mr. Raina: Well, our customer base is today spread across 69 countries. We have products available in 11 different languages. Our customer base is pretty widespread, meaning we deal with banks, we deal with insurance companies, we deal with brokers, we deal with MGAs, TPAs, hospitals, doctors, physicians - meaning it's a newspaper's top Fortune 500 companies. So we deal with - we have - our user base is of a few hundred thousand users across the world. So we have a very highly diversified user base.

TWST: What are some of the key trends or issues you believe are laying the groundwork for Ebix? What will Ebix take advantage of as far as the company's strategies and goals?

Mr. Raina: Well, I think as I said, the underlying principle of Ebix is to remove paper out of insurance. Insurance is still a fairly outdated industry in terms of the amount of paper that is there in the industry. If you look at some of the analyst numbers, a few years back, one of the analysts talked about $59 billion of paper-based processes in the United States alone, just in the property and casualty side of business. That by itself tells you the amount of paper that exists there. So having said that, insurance accounts for $1.5 trillion in the U.S. industry. And Ebix's goal is to take a piece out of that, meaning across the world, and remove paper out of the process. So again, paper makes the business, insurance business, a lot more expensive.

Insurance companies are trying to get more efficient, trying to make more margins. Look at what happened to the telecom sector, meaning over the years how telecommunications have diversified, how it became such a smart business in terms of how different entities are connected. That has not happened in insurance. So insurance is still primarily paper driven. So that's our opportunity.

And having said that, why is Ebix ready to take up that opportunity? Simply because, first of all, we are the only one, only player in the market today who has a - only insurance software services player, who has a global landscape, who can provide a solution across the globe with the same court base, who can provide a solution across all the entities, be it an insurance company, be it a broker or a bank or a consumer or a state government or a health exchange or a - we basically deal with all kinds of entities and are able to converge data. We're able to move data. We're able to converge front-end and back-end processes. We are able to converge all islands that exist in insurance and that is our - that allows us the ability to create networks, the ability to create exchanges, ability to move data seamlessly from one end to another, what the industry calls straight-through processing and that's what our - and that's why we kind of believe that we are one of the players who is ideally situated to take advantage of the opportunity in the market.

TWST: Over this summer, the company staked out a strategic position in London with its acquisition of TriSystems. There was the acquisition of PlanetSoft and Fintechnix in June of this year. Where are the continued opportunities and mergers, acquisitions, joint ventures or strategic alliances for this company over the next two or three years? Are there specific markets or functions you believe need to be filled in?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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