The green shoots spotted by Terry Bourne, chairman of Total Systems Plc, in June (CI No 2,441) appear to have wilted. The London-based financial software, systems and services company, has pushed back the timetable for profiting from its diversification from services into client-server products by at least six months. Bourne blames the delay on prevaricating regulatory committees and the reluctance of some computer departments in the insurance industry to move away from mainframes. Pre-tax profits for the six months to September 30 fell 39.5% to just UKP7,460 on turnover that rose 1.6% to UKP1.1m. Indeed, only interest of UKP34,368, UKP44,020 last time, kept the company in the black, as it reported an operating loss of UKP26,908. Total Systems recently signed an agreement with Ortec Consultants BV, a Dutch operational research consultancy, to market Total’s Optima pensions investment system in the Netherlands and Total Systems to do the same for Ortec’s Performance Attribution and Reporting System, or Pearl, in the UK. Ortec has incorporated Total’s Optima engine into a customised system at Royal Dutch Shell NV in The Hague. Total has also begun work on a system which could lead to a 4,000-user contract for its Ultima insurance package within approximately one year. Both Total Systems packages can run on a variety of systems and are customised to fit the needs of each client. The systems tend to take some time to develop, but once running should require the minimum of maintenance and can be run by the users rather than specialist data processing staff. With the squeeze on insurance premiums, Bourne likens the current British insurance market to the motor industry of the 1970s, with its slow adoption of new technology. The ‘adapt or die’ culture will mean the market will probably shrink to just a handful of companies within 20 years, and Bourne cites Direct Line Insurance as an example of what can be done by recognising clients’ requirements and using technology to achieve them. It continues to pay no dividend.
