Ebix Profile
Ebix, Inc. and its subsidiaries (Ebix) operate as an international supplier of on-demand infrastructure exchanges to the insurance, financial services, travel, and healthcare industries.
In the insurance sector, the company’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis using software-as-a-service (SaaS) enterprise solutions in the areas of customer relationship management (CRM), front-end and back-end systems, and outsourced administrative and risk compliance.
The company's products feature fully customizable and scalable on-demand software designed to streamline the way insurance and financial industry professionals manage distribution, marketing, sales, customer service, and accounting activities. With a ‘Phygital’ strategy that combines physical distribution outlets in India and many Associations of Southeast Asian Nations (ASEAN) countries to an Omni-channel online digital platform, the company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange (Forex), travel, pre-paid gift cards, utility payments, lending, and wealth management in India and other ASEAN markets.
The company has domestic and international operations spread across approximately 200 offices. The countries in which the company has operating facilities and offices, include, among others, Australia, Brazil, Canada, India, Indonesia, New Zealand, the Philippines, Singapore, the United Kingdom (the U.K.), the United Arab Emirates and the United States of America (the United States or the U.S.). In these locations, Ebix employs skilled technology and business professionals who provide products, services, support and consultancy services to thousands of customers in over 70 countries across six continents.
The company’s EbixCash Exchanges (EbixCash) division executes a ‘Phygital’ strategy that combines over 650,000 physical distribution outlets in India and many ASEAN countries with an Omni-channel online digital platform. The company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange (Forex), travel, pre-paid gift cards, utility payments, lending and wealth management in India and other Southeast Asian markets. EbixCash’s Forex operations have emerged as a leader in India’s airport Forex business, with operations in 20 international airports, including Delhi, Mumbai, Hyderabad, Chennai and Kolkata.
EbixCash’s inward remittance business in India is the clear market leader due to its geographic depth and its affiliations with international money transmitters, such as Western Union, Moneygram and Ria. EbixCash, through its travel portfolio of Via and Mercury, is one of Southeast Asia’s leading travel exchanges, with over 500,000 agents and approximately 18,000 registered corporate clients. EbixCash's financial technologies business offers software solutions at the enterprise level for banks, asset and wealth management companies and trust companies within India, Southeast Asia, the Middle East and Africa. The EbixCash's e-learning solutions are provided to schools throughout India via high quality 2-D and 3-D animation and multimedia learning. EbixCash's business process outsourcing services provide information technology and call center services to a variety of industries.
Products and Services
The company’s product and service strategy focuses on the expansion of connectivity between all entities via its EbixCash and Ebix Exchange family of products in the financial, Forex, travel, life, health, workers compensation, risk management, annuity and property and casualty (P&C) sectors; worldwide sales and support of P&C back-end insurance and broker management systems; worldwide sale, customization, development, implementation and support of its P&C back-end insurance carrier system platforms; risk compliance solutions services, which include insurance certificate origination, certificate tracking, claims adjudication call center, consulting services and back office support; and e-governance/e-learning solutions in emerging world markets. Ebix also provides software development, customization, and consulting services to a variety of entities in the insurance industry, including carriers, brokers, exchanges, and standards-making bodies.
Ebix’s revenue streams come from three product/service channels. The company derives its revenues primarily from its financial transaction fees, software subscription and transaction fees, software license fees, risk compliance solutions services fees, and professional service fees, including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications.
EbixCash Exchanges
EbixCash revenues are primarily derived from the sales of prepaid gift cards and consideration paid by customers for financial transaction services, including services like transferring or exchanging money. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable.
EbixCash also offers several other services, including payment services and ticketing and travel services for which revenue is impacted by varying factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.
The main services from which EbixCash derives revenue are as follows:
Gift Cards
EbixCash sells general purpose prepaid gift cards to corporate customers and consumers that can be later redeemed at various merchants. The gift cards are co-branded between EbixCash and its card-issuing banking partners and are affiliated with major payment associations, such as VISA, Mastercard, and Rupay. The gift cards are sold to a diversified set of corporate customers from various industries. The gift cards are used by corporate customers to disburse incentives to the end users, which are primarily their employees, agents and business associates. The gift cards sold by EbixCash are not reloadable, cannot be used at ATMs or for any other cash-out or funds transfer transactions. Gift cards issued by EbixCash are valid for a period of 15 months from the date of issuance for virtual cards and three years for physical cards. EbixCash has entered into arrangements with banks and financial institutions to settle payments to merchants based on utilization of the gift cards.
The company has end-to-end responsibilities related to the gift cards sold, from the activation and ongoing utilization of the gift cards to customer service responsibilities to risk of loss due to fraud on the gift cards sold. EbixCash acts a principal in the sale of gift cards.
EbixCash Travel Exchanges
EbixCash Travel revenues are primarily derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with the company’s reservation services; ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and credit card processing rebates and customer processing fees.
EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service.
EbixCash Travel revenue for the corporate meetings, incentives, conferences, and exhibitions (MICE) packages is recognized at full purchase value at the completion of the obligation. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.
EbixCash Money Transfer
For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This performance obligation typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information; the money transfer has been processed; the customer has received a unique transaction identification number; and funds are available to be picked up by the beneficiary.
Foreign Exchange and Outward Remittance Services
For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled.
Consumer Payment Services
EbixCash offers several different bill payment services that vary by considerations, including among other factors, such as who pays the fee to EbixCash (consumer or biller); whether the service is offered to all consumers; whether the service is restricted to existing biller relationships of EbixCash; and whether the service utilizes a physical agent network offered for consumers’ convenience. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service - collecting money from the consumer and processing the bill payment transaction. This service provides the billers real-time or near real-time information regarding their customers’ payments and simplifies the billers’ collection efforts. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue.
EbixCash Technology and Business Process Outsourcing Services
EbixCash also offers on-demand technology to various providers in the area of lending, wealth and asset management, and travel across the world. Additionally, EbixCash provides information technology (IT) and call center outsourcing services to companies in a variety of industries, both in India and globally. The EbixCash technology software solutions are generally delivered on a SaaS subscription and/or transaction based pricing model.
Insurance Exchanges
Insurance Exchanges revenues are primarily derived from consideration paid by customers related to the company’s SaaS platforms, related services and the licensing of software. A typical contract for the company’s SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. The company also has separate software licensing (on premise/ perpetual), unrelated to the SaaS platforms, which is recognized at the point in time when the license is transferred to the customer.
Software-as-a-Service
The company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. The company determines the stand-alone selling price based on observable price of products or services sold separately in comparable circumstances when such observable prices are available.
Software Licenses
Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license.
Subscription Services
Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. The company’s subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals.
Transaction Fees
Transaction revenue is consisted of fees applied to the volume of transactions that are processed through its SaaS platforms. These are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient.
Professional Services
Professional service revenue primarily consists of fees for setup, customization, training, or consulting services. Professional service fees are generally on a time and materials basis or a fixed fee.
Risk Compliance Solutions (RCS)
RCS revenues consist of two revenue streams - certificates of insurance (COI) and consulting services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These revenues are transaction-based. Consulting services revenues are driven by distinct consulting service engagements rendered to customers, for which revenues are recognized using the output method on a time and material basis as the services are performed.
COI Creation and Tracking
The company provides services to issue and track certificates of insurance in the U.S. and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked.
Consulting Services
The company provides consulting services to clients around the world for project management, integration, development and testing. Consulting services fees are generally earned on either a time and materials or a fixed fee basis.
Product Development
The company’s product development expenses were $41.2 million for the year ended December 31, 2022.
Competition
EbixCash
The company’s competitors include banks, such as ICICI Bank and HDFC Bank, along with money exchange companies, such as Thomas Cook.
Insurance Exchanges
Life Insurance Exchange: Ebix has two main competitors in the life exchange area, such as iPipeline and Insurance Technologies.
Annuity Exchange: Ebix has two main competitors in the annuity exchange area, iPipeline and Insurance Technologies.
SmartOffice: The company’s competitors in this space include Salesforce.com, iPipeline, Redtail, Microsoft, SAP and Oracle.
Employee Benefits: Ebix has a number of competitors of varying sizes in this area. Trizetto is the largest employee benefits software player in the market in the U.S., while there are other smaller competitors, such as Mphasis, EDS, VBA, Plexus, and HealthEdge.
Risk Compliance Solutions (RCS)
Ebix’s RCS COI service offering in the U.S. competes with companies, such as Applied Systems, MyCOI.com, and Certfocus. Due to the highly fragmented market, the Ebix RCS COI service offering also has a number of smaller competitors, such as Datamonitor, CMS, and Exigis.
WinBEAT is a Policy Management System (back-end broker system) targeted to the general insurance broking sector and is primarily sold in Australia. WinBEAT is targeted at small- to medium-sized P&C brokers. The product is available only in English and can be deployed in a few hours with minimal training. WinBEAT competes in Australia with local vendors, such as Brokers Advantage and Steadfast Insight. Ebix has deployed WinBEAT to emerging insurance markets, such as Papua New Guinea and some of the Pacific Islands, with possible future deployment to other regional markets in the future.
In the Carrier P&C Systems, Ebix has two system offerings for P&C carriers, Ebix-Advantage and Ebix AdvantageWeb. Ebix-Advantage is targeted at small, medium and large P&C carriers in the United States that operate in the personal, commercial and specialty line areas of insurance. Ebix AdvantageWeb is designed for the international markets and is targeted at the small, medium and large P&C carriers in the international markets that operate in the personal, commercial and specialty line areas of insurance. Ebix-AdvantageWeb is designed to be multi-currency and multilingual and is deployed in Brazil, the U.K., and the U.S. Competition to both these products comes from large companies, such as CSC, Guidewire, Xchanging, and Accenture; and specialty medical malpractice players like Delphi.
History
The company, a Delaware corporation, was founded in 1976. It was incorporated in 1983. The company was formerly known as Delphi Systems, Inc. and changed its name to Ebix, Inc. in 2003.
