Industry-specific Software Business Plan

As outlined in the Marketing plan, ISL will operate as a software vendor and market directly to “End User” clients. Additionally, ISL is in the process of developing a number of affiliations and partnerships with major software and services providers to the insurance and financial services market. These additional distribution channels will supplement and enhance the performance and functionality of ISL’s affiliates and partners products and services.

ISL will market directly to consumers through consumer communications e.g., financial advisory television and radio programs, Web-based promotions, our direct website and general market advertising strategies.

Positioning

We will position our solutions as the quality and innovation leader by emphasizing our superior integrated functionality and flexibility. Our enhanced engineering and technical leadership will allow ISL to market our high performance and state-of-the-art capabilities to a broad range of customers, service providers and partners.

We will also position ourselves as providing highly customized solutions to clients and consumers, and will be highly flexible and responsive in adapting our solutions to the needs of the marketplace. Being a younger, smaller and more customer-focused company than our competitors, we will have the advantage of being an industry innovator.

5.1 Competitive Edge

ISL will be a profitable and successful company for several reasons: the proven performance of the IV software; the development of affiliations and partnerships with major software and services providers to the insurance and financial services market; the ease of implementing our tools; the ability of the IV software to significantly increase customer revenues while enhancing their ability to enhance customer service, improve retention and provide their customers with peace of mind.

ISL’s unique products fill a substantial void and will enable ISL to establish itself as the pre-eminent valuation solution provider in the market. While potential competitors have focused on providing costing information to the underwriting and claims operations within the insurance industry, there are currently no Web-based valuation applications available in the North American market. In addition, our competitors do not have the ability to combine personal contents coverage data and document storage and retrieval services.

ISL will be able to expand and protect its market share through embedding IV into third party insurance software solutions. ISL’s sales and distribution strategy will be further enhanced with the development of alliances with the major insurance industry service providers and consulting firms.

As proof of the concept for the U.S. market, the software has been sold to, and successfully implemented by, a number of the major insurance providers in the Australian market. ISL will duplicate and expand this success into the U.S. market. Future plans include expansion into Canada, the United Kingdom and Europe. Our distinct advantages by target market include:

Insurance companies, general agents and brokers:

• Currently no Web-based valuation applications available that are focused on both the front-end application process and the consumer
• Alternative “static” offerings are PC, paper, telephone and/or written survey based
• Potential competitors are significantly more expensive and provide less functionality
• ISL’s Dynamic Elemental Modeling process (DEM) uses real time cost information rather than the inherently less accurate factoring approach used by competitors’ products

Consumer based solutions marketed directly to retail customers:

• Contents coverage calculators and information are not provided by potential competitors
• Additional information, information services and information storage solutions will be provided to enhance customer service and provide differentiated solutions

Retail product and service providers:

• Links to product and service providers to ensure the most immediate available replacement of lost and /or damaged possessions
• These links will in turn provide our partners with qualified / great customers 
• Customers will then be able to take advantage of enhanced service and reduced prices

In addition to direct sales to insurers and consumers, ISL will be able to expand and protect its market share through embedding our Insurance Valuer software into the third party insurance software solutions through the wealth of contacts between these providers and senior ISL management.

ISL’s sales and distribution strategy will be further enhanced with the development of alliances with the major insurance industry service providers and consulting firms.

5.2 Marketing Strategy

ISL will market the web based “Insurance Valuer”  (IV) software directly to Insurance companies, General Agencies, mortgage providers and ancillary industries. ISL will operate as a software vendor and market directly to “End User” clients. Additionally, ISL is in the process of developing a number of affiliations and partnerships with major software and services providers to the insurance and financial services market.  These affiliations and partnerships will provide ISL with additional distribution channels for the IV software and will supplement and enhance the performance and functionality of ISL’s affiliates and partners products and services.

The consumer base will initially be targeted through combined broad media and targeted Internet-based education campaigns, on the value of accurately insured property values. The campaign will include the provision of value-added hosting solutions for the electronic storage and retrieval of important insurance, legal and securities documentation and reminders for policy and documentation review (s). As we increase awareness amongst consumers of the risks they face in being under-insured, the greater value our services will accrue. The broad media campaign will include spots and conversations on financial news networks such as MSNBC, CNN, CNBC etc., and the major broadcast networks’ news shows, such as The Today Show on NBC, and Good Morning America on ABC.

Small business lenders will be targeted through direct and affiliate sales campaigns to highlight their need to protect their interests in individual property which provides the major share of collateral / security used to secure loans to new and/or existing small businesses. If a small business owner’s home and property were not adequately insured and they were to suffer a loss, and their business were significantly impacted, the lender would potentially not be able to collect on the loan. 

Mortgage lenders and real estate organizations will also be targeted through direct and affiliate sales campaigns to enhance their ability to provide value added services to their clients when they are researching the cost of purchasing and owning new and/or additional property.

The provision of our integrated suite of solutions across the broad range of financial services providers and direct to consumers will further enhance our marketing strategy by differentiating ISL from our potential competitors and help protect our revenues from significant market fluctuations.

5.3 Sales Strategy

Our sales strategy is based on the superior quality and functionality of our solution:

• Underlying property replacement cost data
• Consumer-oriented and -empowering approach
• Additional contents valuation data and functionality
• Additional digital record and documentation storage facilities and services

Initial sales efforts will be focused on three areas:

1. Top 10 market share accounts (based on percentage of premium dollars which account for 60% to 65% of the market)
2. U.S.-based operations of organizations that already utilize the Insurance Valuer solution in Australia
3. Web-based, direct-to-consumer operations

We will support and enhance our direct sales efforts through the development of strategic partnerships and distribution arrangements where the IV solution will be an integral part of our partners and distributors broader solutions. Partnership discussions are already in progress with a number of the major providers of existing industry leading automated application, decisioning and policy management providers and consultants. The senior staff of ISL has significant associations and careers in direct and consulting roles across the insurance, small business and mortgage lending industries as well as retail and marketing experience.

Our primary sales method is face-to-face selling, particularly to senior underwriting and consumer marketing executives. Our sales tactics differ from our principle competitors in that we approach both senior executives and operational resources to ensure acceptance and maximum utilization of the functionality of our solutions.

Because so much of the market is concentrated at a few major accounts, the core of our sales effort is selling to these few companies. While we are certainly pleased to get orders from mid-sized and smaller accounts, we will focus our efforts overwhelmingly on the key accounts. Being a relatively small company with limited resources, we would rather focus all of our effort on covering a few accounts really well, rather than covering many accounts less thoroughly. Also, the smaller accounts tend to eventually buy many of the same solutions as the larger accounts even without any direct sales efforts.

We will also use the Internet to distribute our solutions and services directly to consumers and to attract new customers. We will publicize our website in appropriate media, journals and trade publications with references in the major search engines, and links to related websites of existing and potential clients, partners and affiliates and data and service providers.

Sales terms

We will sell to businesses on established net 30 day credit terms, with payment for two year’s maintenance in advance at 20% of software price. Unpaid invoices will be charged at 1.5% per month.

We will provide our direct-to-consumer solutions, including individual valuation services, document and information storage services, on a cash basis. Consumers can choose to buy the service for 6 months, one year, or two years, with renewal options at the same price.

In the first year, we will also offer a “pay per valuation” service, where consumers can get an accurate valuation of their property immediately for a set fee. We will then refer consumers who utilize the service on a “pay per valuation” basis to those insurers who also use the service. Consumers will realize additional and immediate benefits from their purchase and insurers will be provided with qualified / under-insured leads rather than ‘browsing’ consumers.

5.3.1 Sales Forecast

Insurance Valuer – Insurance, Documents Plus and Consumer sales forecasts are all based on conservative first year growth figures with lower dollar figure sales assumed during the first year. Figures below are rounded to the nearest $10K level based on initial sales figures and annual growth targets.

Insurance Valuer – Insurance, Mortgage and Lender groups

ISL’s Australian affiliate has seen strong sales in initial offerings. Our projected sales forecasts for industry groups are based on initial contacts with representatives of the major American insurers, market research, and the better price and quality values we offer our clients, compared to current competitors. We expect rapid growth in the second and third year, as end-user market “follower” organizations see the value and results being achieved by the innovator / first adopter organizations.

Documents Plus

First year sales of $370,000 with achievable growth target of 30% per year

Insurance Valuer – Consumer Solutions

First year sales of $700,000 with achievable growth target of 30% per year

Similar growth figures have already been achieved by our Australian affiliate organizations. Please refer to the attached International Cost Research Sales and Revenues spreadsheet for further detail.

As a percentage of revenues, sales costs will remain relatively stable, with a small increase expected in packaging and shipping in years two and three, as we distribute the software to more and smaller groups and to individuals.

5.4 Milestones

The following table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. The most important programs are the sales and marketing programs listed in detail in the previous topics.