Mr. Kellner pointed out that "when 100 different insurance companies have different models for rating [customer] risk, you can't make money at it." He also cited differences in the ways carriers use credit information in the rating process as a confounding factor.

"Carriers seem to be having more and more of a distant relationship in trying to provide rates," he continued. "Insurers are being proprietary.

"Economies of scale and carrier relationships are the two ingredients needed to make a rating business model work successfully," noted Mr. Kellner. "Due to the increasing complexity of providing accurate comparative rating, the effort to provide and maintain this capability has taken resources that could be better utilized by Applied Systems Inc."

Mr. Kellner added, "A company like MI, that has obtained these economies of scale, is better suited to operate efficiently and provide high quality rating to customers."

The move will enable Applied to increase its efforts in product development and "do more faster," said Mr. Kellner. "I don't like giving up on anything. If [comparative rating] was my core business, I would find a way to stick with it. We're going to stick to management systems."

"This acquisition provides a great opportunity for agencies to re-establish comparative rating as the preferred agency workflow," stated Scott Deetz, CEO of Eleva, Wis.-based MI-Assistant. "In addition, this acquisition allows MI to expand our geographic offering and form even closer partnerships with insurance carriers."

Current Applied Rating customers are being notified of the change and provided with "options that are best suited for their individual business," said Applied. "Depending on the state(s) they utilize Applied Rating Services in, these customers will be offered similar services through MI-Assistant or an alternative rating vendor that has agreed to work through the conversion process in a seamless, non-intrusive fashion."

"We are researching options to provide all former Applied Rating customers with suitable alternatives. We want to avoid any unnecessary interruption to their daily business, while ensuring that they will be provided the same level of service that they received as an Applied Rating customer," said Mr. Kellner.

MI-Assistant currently provides automation solutions to more than 2,000 agencies as well as to insurance carriers, said Applied. Further information is available at www.mi-assistant.com.

Since 1983, Applied Systems has developed software for independent insurance agents, brokers, managing general agents and insurance companies, as well as banks and other financial institutions with insurance operations, the company said.