FirstService Financial, Inc.
We manage over 6,000 residential and commercial properties in North America with an estimated insured value of $100 billion. Our extensive database tracks all policy and claims information across that portfolio. We have leveraged the data and commissioned actuarial reports that demonstrate our managed properties have better long-term claims experience than the broader market. This unique data enables us to offer risk management solutions that are unmatched in terms of coverage and price.
In 2011 we expanded our distribution capability so that we can offer our insurance expertise to all clients in North America. During the year we completed new insurance placements with over 600 clients - in each case offering better coverage at lower cost.
Insurance costs are a substantial component of our clients' operating budgets - averaging 10%. Our ability to reduce this cost has delivered significant value and created a tangible differentiator for FirstService.
Each of our 6,000 North American clients have operating bank accounts and most have separate reserve and escrow bank accounts. We have consolidated these separate accounts into select top tier banking institutions - creating value for our clients by eliminating bank fees on operating accounts and delivering significantly higher interest rates on reserve and escrow funds.
In 2011 the average daily deposits in our partner banks grew to over $1.5 billion. The consolidation of these accounts created more than $15 million in value, either through incremental returns to our clients or the elimination of fees. Our efforts to help our clients better manage their cash deposits has delivered significant value to them while creating another tangible differentiator for FirstService.
Combined Buying Power
The growth in our property management business has increased the scale of the operating budgets we manage to more than $7 billion annually. This has created a unique opportunity to seek cost rationalizations and bulk purchasing discounts on behalf of our clients. To leverage our aggregated purchasing capability, we launched a business intelligence application that enables us to data mine the financial information inherent in our managed portfolio. Business users at the property and corporate levels can now analyse expenditures at a high level - for example by expense type - as well as drilling down to the vendor details level.
In 2011, we used this information to renew or create new bulk-purchasing agreements with dozens of our largest vendors in areas that would generate the greatest return to our clients. This resulted in over $12 million of savings for our management clients. Our efforts around combining the buying power of all of our clients and translating that into significant savings for our clients is another tangible differentiator for FirstService.