The Phoenix general insurance system of SQL*Wizard, Inc., the certified partner of Oracle Philippines, is gaining acceptance in the insurance industry.

SQL has sold its Phoenix solution to PNB General Insurers, Inc. and Government Service Insurance System (GSIS) through Unisys Philippines as the prime contractor.

The revenues derived from these deals, except for the license component of P2.6 million per sale, has been recognized throughout the implementation period of the Phoenix system ranging from six months to one year depending on the customer requirements.

SQL's Business Online, the authentication system developed for ISAP (Insurance & Surety Association of the Philippines), has been generating gross revenues of P0.6 million a month.

This is a five-year contract with ISAP and volume of business is expected to increase once the system is rolled out throughout the country.

Its Business Online has generated revenues of P1.6 million in the third quarter of 2002. This line of business was an offshoot of the five-year contract awarded to SQL*Wizard by ISAP for the development, deployment and management of an authentication system for third party liability (TPL) insurance issued by ISAP member-companies.

The system is intended to curb the proliferation of fake TPL policies through an authentication process that may be done through the internet or short messaging service (SMS).

Under the agreement, SQL*Wizard shoulders all the costs involved including manpower and the infrastructure required to support the authentication process.

SQL*Wizard derives revenue through a per transaction fee of P5.00 per authentication which is subject to annual adjustment depending on the actual volume of authentication during the preceding year.

The company reported that its cost of sales in the third quarter of 2002 amounted to only P1 million, a drop of 90 percent from the previous quarter’s level of P9.3 million.

"This favorable variance was due to the fact that Phoenix which accounted for 82 percent of the total license sales, is SQL*Wizard’s own product and has no corresponding cost of sale."

During the three quarters of 2002, the cost of sales declined to P26.9 million despite the 17 percent growth in license sales.

The margin on license sales has improved from 19 percent in 2001 to 34 percent last year due to the sale of Phoenix insurance system.

SQL’s net income in the third quarter of 2002 increased by 312 percent to P2.6 million compared to 2001. Its next income on the nine-month period ending September 2002 rose by 268 percent to P5.2 million.

The substantial improvement in net income was brought about by the sustained growth in consulting services, the improved license sales from the Phoenix insurance system license sales, the turnaround in its training business and the incremental contribution of its business online.

License sales contributed only P6.4 million in the third quarter, a decline of 47 percent from the same period in 2001.

Of the total license sales of P6.4 million in the third quarter of 2002, Oracle license sales amounted to P1.2 million only and the balance of P5.2 million or 82 percent was derived from the sale of Phoenix, SQL’s general insurance software package.

The significant decline of Oracle license sales in the third quarter was reflective of the downturn experienced by the company in the license sales market.

The company's total assets have grown by 26 percent to P64.6 million as the end of the third quarter of 2002.

Total current assets went up by 54 percent to P38.8 million. Total current liabilities grew by 85 percent to P28 million.

SQL's increased liabilities last year have put pressure on the company’s liquidity as most of the accounts become due and payable in the last quarter of 2002.

Delays in collecting the accounts receivable from the company’s customers would adversely impact on its ability to settle its obligations with suppliers on a timely basis.