Jack Henry divests insurance outsourcing line

According to a Jack Henry news release, Banc Insurance Services Inc. was founded in 1999 to provide a turnkey outsourcing solution to allow financial institutions to own an insurance agency without the capital investments required to build or buy an agency. BIS was acquired by Jack Henry in 2004 and assimilated into its ProfitStars brand in 2006.

The company will be rebranded as Insuritas Inc., according to the release, and its founder, Jeffrey Chesky, will serve as president and CEO. The business line’s employees will join the independent company.

Jack Henry Chief Financial Officer Kevin Williams said in the release that his company has a disciplined acquisition strategy that establishes clear revenue contribution and margin expectations for each acquisition, but despite its best efforts, the insurance agency outsourcing line didn’t perform as anticipated.

“We thoroughly evaluated our options and determined divesting this business line was in the best interest of our company and our shareholders. Divesting this business line will generate a modest improvement in our margins and eliminate the negative impact it had on cash flow,” Williams said in the release. “We also determined that selling this business line to its highly specialized management team is in the best interest of our joint clients, because it will provide a consistent service experience and ongoing access to quality insurance products.”

Chesky noted in the release that, as part of Jack Henry, the insurance agency outsourcing line received an upgrade to its master agency platform and add to its technology infrastructure. Moving forward, however, he said company leaders see more growth potential as an independent venture.

“We are excited about the opportunity to leverage our success and continue designing, implementing and managing successful insurance agency aisles in the stores of financial institutions nationwide,” Chesky said in the release.