Sedgwick CMS Fully Acquires Cambridge TPA Portion of U.S. Operations. All Former Cambridge Operations Now Sedgwick As Sedgwick Continues To Grow.
By Lonce LaMon - July 2, 2011
Sedgwick Claims Management Services (Sedgwick CMS), based by its Corporate Headquarters in Memphis, Tennessee, has just purchased the Cambridge Management Services Group portion of the Xchanging claims operation in California and in the entire United States.
In 2009, Xchanging purchased Cambridge Integrated Services Group, Inc., with offices handling workers’ compensation claims in Pasadena, Santa Ana, Sacramento, and San Diego, California, and consolidated all of these offices into one large California claims service center in Rancho Cordova, California. But, now Xchanging, a world wide back-office and outsourcing company, has sold this former Cambridge third-party-claims administration aspect of their business in full in the United States to Sedgwick CMS.
Paul Posey, the Chief Operating Officer, and Peg Brooker, the Communications Director of Sedgwick CMS spoke to www.adjustercom.comby phone on Wednesday, June 29th.
Paul Posey, COO of Sedgwick CMS: Sedgwick purchased the U.S. Claims operations of Xchanging. The simple way to describe it is that Sedgwick purchased the Cambridge TPA that we were all familiar with.
While I am aware that they went through the Xchanging name change, most of us in the business know that as the Cambridge organization. But it’s the U.S. TPA claims operation for Xchanging.
Lonce LaMon, www.adjustercom.com: I remember Xchanging bought Cambridge in 2009 and consolidated all the California claims offices into one office in Rancho Cordova, California.
Paul Posey: The consolidation of Cambridge is what was recommended by the Xchanging parent company. And California was not the only place that that happened. Their strategy was to take the legacy Cambridge infrastructure and to begin to consolidate that into their hub-office structure.
Lonce LaMon: So, is that Rancho Cordova claims office of Xchanging now Sedgwick CMS?
Paul Posey: Technically, it is a Sedgwick CMS office right now and it takes some time to get all of the name change and brand name changed the way you want it with the signs on the door. But the folks who work there now are Sedgwick CMS employees. And we are glad to have them on-board.
At this time of this interview with COO Paul Posey and Communications Director Peg Brooker, there was a leadership conference going on in the Sedgwick Memphis corporate office. There were 500 management professionals from around the country participating in the conference. It included managers from the legacy operations: the SRS operations and Cambridge.
Lonce LaMon: And what about the fact that you just bought SRS (Specialty Risk Services)? I remember that happened just a few months ago. I wrote an article about it.
Paul Posey: The SRS acquisition was announced on December 21st. The agreement didn’t actually close until March 1st. We acquired the entirety of the TPA claims operations of SRS from The Hartford.
Lonce LaMon: Any future plans to buy anybody else?
Paul Posey: (While laughing in unison with Peg Brooker.) That’s a good question. I think Sedgwick is a very responsive organization. If we see opportunities in the market place, we will pursue them. But we have a lot of work to do to make sure the customers and colleagues of SRS and Cambridge understand that Sedgwick is fully committed to deliver our service expectations … And that’s going to keep us plenty busy. So, I would say while we’re very opportunistic, it would probably be a surprise if there were some other really big announcement in the near future.
According to Paul Posey, Sedgwick has been successful with their level of organic growth, meaning through their regular sales activity efforts, and then having those customers recommend others. The claims community has supported Sedgwick, and this success has been able to facilitate those acquisitions like Cambridge and SRS. And while they’ve been competitors for years, Sedgwick has realized after these acquisitions that there have been a lot of very significant cultural fits.
Paul Posey: The way these claims professionals are very committed to their customers is allowing Sedgwick to service our customers. With Cambridge/Xchanging, I think the employee base that came across in the acquisition is very happy and very relieved that Sedgwick is a very large and a very stable organization.
Not only does Sedgwick CMS handle workers’ compensation claims, but it handles a vast variety of other types of claims.
Paul Posey: Associated with the workers’ compensation activity that we have, we also provide a full suite of managed care services. So, we employ nurses in Utilization Review, telephonic case management, and we provide bill review services to our customers as well.
And in the other property/casualty lines, we do auto liability, general liability, medical malpractice, and one of the things we’re really excited about with the acquisition of Cambridge, is that we’ve acquired a new line of business and it’s called Consumer Claims.
Consumer claims is not like the traditional insurance industry claims that you and I are accustomed to. Those consumer claims relate to the administration of credit card warranties. So, large credit card companies offer benefits to card holders… For example, if you rented a car with one of those credit cards, and there was an accident, the credit card company would actually pay the deductible under an insurance policy; it is a card member benefit. So, with the Cambridge acquisition, we have a new suite of claims related services. So, we are very excited about diversifying our product base.
Specifically to California, Sedgwick CMS continues to grow. Both through the normal sales process, and also through acquisitions. Posey made it a point to emphasize that Sedgwick has opportunities for talented claims examiners and that they are really in the marketplace trying to find talented claims professionals every day.
Paul Posey: To the extent that that’s of interest to your readership, I would just give you that tidbit, but particularly in California, that it is a very complex market in which to administer claims. We fully appreciate that, and that’s why the talent pool there is so important to us.
Sedgwick has created and presently operates an industry advancement program housed in their Long Beach office. They train new examiners by taking people that are not necessarily in the industry and providing them with skills and training.
Paul Posey: We think it’s important to do that because the pool of claims professionals is not going to grow unless one of us in the industry—either a carrier or TPA—is reaching out, bringing in and training new talent. So, we actually built that into Long Beach because of the demand for talented, capable claims professionals in California.
Presently, Sedgwick has 190 claims service locations around the country and 9,500 employees.
Paul Posey: Sedgwick is not into consolidating. We want to be where our customers want us to be and where we can hire the talent.
lonce@adjustercom.com
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