When David Kerford joined Hartland-based AQS Inc. as chief executive officer in 2005, the company was struggling.When David Kerford joined Hartland-based AQS Inc. as chief executive officer in 2005, the company was struggling. A few months before he arrived, the company had been purchased by Grey Mountain Partners, a Boulder, Colo.-based private equity firm. AQS develops policy administration software for the property/casualty insurance industry.
The company had a quality product, AQS/Advantage, but its focus was on the technology instead of its customers in the insurance industry. It had been a long time since a new customer came on board, Kerford said.
AQS was previously owned by a group of AQS customers. Grey Mountain saw potential in the company and decided to buy it.
A combination of a new business focus, a new management team, an investment in employee development and an overall motivation for increased quality has given AQS a boost.
In 2006, the company added four new clients, reported a 48-percent increase in revenue, increased its number of employees from 145 to 193 and has plans to move into a second location. Kerford did not disclose the company’s annual revenues.
“Grey Mountain buys businesses that they believe have underlying unrealized value,” Kerford said. “They believe that good business practices and ethical business practices can raise the value of a company and they believe that that is all about the management.”
The new management team included professionals who either knew each other from the field or were well-known industry veterans with high ethical standards, Kerford said.
The new management includes: Jack Walton, chief operating officer, who Kerford met while working at The Leverage Group in Hartford, Conn.; Bruce Davis, a former colleague of Kerford’s at Policy Management Systems Corp. (PMSC) in Columbia, S.C., which merged with Computer Sciences Corp. (CSC) of El Segundo, Calif., in 2000; John Worden, chief technology officer, who was promoted from within AQS when Kerford joined; John Murry, chief financial officer, and Jill Austin, director of quality, who were former employees of AQS and brought back by Kerford; Nancy Hines, director of marketing, who was brought on by Davis; and Kelly Renz, vice president of human resources, who joined in June 2006.
Kerford performed a quality analysis of the business and determined that customer service and implementation was poor. Part of the turnaround to a new focus was to increase the quality of the rollout.
“Everybody in this space has this issue, whether they will admit it or not is another question. But carriers only do implementations of this magnitude once every 15 to 20 years,” Kerford said. “By logic, they can’t be expected to be experts in how to do implementations, but sometimes we vendors treat them as if they know more than they do about implementations. And we shouldn’t do that. We should know our business cold from how to get it up for them, how to implement for them and help them along the best way. Whether it is what they thought they were going to do or not, we have an obligation to train them how to do it the right way.”
Kerford has more than 20 years of experience in the insurance industry and most recently served as president of The Leverage Group, a software company that serves the life insurance industry.
“Quality is nothing more than the delivery of expectations,” Kerford said. “If the expectations aren’t met, it is hard to have a definition of quality and that is where things get ragged or fluffy and it is hard to succeed.”
Now, AQS has regimented metrics in place for every delivery that customers receive from the company.
“I have asked every one of our recent sales in the last two years, ‘Why did you buy from us?’ And they say, two reasons, and they all say the same thing, ‘Your system works and your people are incredible.'” Kerford said. “And they are right.”
The employees at AQS are knowledgeable about the insurance industry, which is a huge sell for a company that develops technology, Kerford said.
“I was pleasantly surprised when I got here, not knowing what exactly to expect in that regard, this company is extremely deep in insurance expertise,” Kerford said. “We did not talk about that to prospects before. We did not bring our prospects into Hartland, Wisconsin I don’t know why we didn’t. We just didn’t. And I felt the best way to let our prospects and customers get to know us and realize if they could work with us or not is to talk to our people inside here. And when we started bringing those prospects and our customers in, they wanted to do business with us.”
Kerford plans to add 80 to 100 employees to the AQS staff in 2007.
In July, AQS will expand part of its staff into a new office building that is under construction across the street from AQS, which is located at 1325 Walnut Ridge Drive.
AQS will lease the entire first floor of the building, totaling 13,000 square-feet. The office space will have room for 83 employees, Renz said.
The second floor will house RC Insurance, which owns the building, operating under Jabez Real Estate Ventures, Renz said.
AQS currently has five years left on its lease in its main building through BRC Inc. in Hartland and has plans to find a larger location to house all of its employees under one roof when that lease is up.
“There has been an awful lot of change in the last year. There is a ton of change going on here, but the folks have been very accepting of it, and of the standards around those changes, and the quality has improved dramatically,” Kerford said.
Location: 1325 Walnut Ridge Dr., Hartland
Founded: 1979
Industry: Policy administration solutions
Owner: Grey Mountain Partners
Leadership: David Kerford, chief executive officer
Employees: 193
Web site: www.aqssys.com
