Delphi Information Systems in Westlake Village signed a five-year agreement with CIGNA to sell Delphi's computer systems to certain independent agents and brokers who write CIGNA insurance policies.
The agreement, under which CIGNA will provide financial incentives to agents and brokers who buy Delphi's machines, is expected provide Delphi with about $5 million in additional revenue during its present fiscal year, which ends March 31, and could generate about $40 million in revenue over five years, Delphi said.
Delphi sells computer systems aimed specifically at brokers in the property-casualty insurance business. In its fiscal year that ended March 31, the company lost $1.7 million on revenue of $18.7 million.
The agreement also will enable Philadelphia-based CIGNA, a major insurance carrier, to buy up to 11% of Delphi's stock for $7.50 a share, provided certain sales goals for the Delphi computers are met.
Delphi's stock had soared to $7 a share from $3.50 during the second quarter, largely because Delphi had announced that it planned to sign such an agreement in the near future.