Indiana-headquartered Shepherd Insurance, ranked as one of the largest groups of independent agencies, has acquired Arnold Insurance in southwest Florida, the company announced.
The partnership will keep the Arnold team in place while giving access to Shepherd’s broader carrier relationships and resources. Kyle Arnold is owner of the agency in Port Charlotte, near Fort Myers. The agency was founded in 2014.
Shepherd, founded in 1977, now has seven Florida agency offices and 45 offices in six states, writing commercial and personal insurance, and offering employee benefits. Quinn Shepherd is CEO.
The legal squabble originated late last year when Applied Systems sued Comulate on allegations that Comulate misappropriated trade secrets. Ardent Labs, doing business as Comulate, developed a software that integrates with Applied’s insurance agency management software, Epic. In order to develop its product, Comulate created a fake insurance agency, “PBC,” to use Epic. Applied noticed “abnormally large usage” by PBC of Epic.
Comulate fired back early this year with a federal antitrust lawsuit against Applied. Comulate said it seeks to “halt an entrenched monopolist’s unlawful campaign to destroy a competitor it could not acquire or outcompete.” Comulate has said, “Applied has not identified a single Comulate product feature that incorporates any Applied trade secret.”
Comulate does not deny creating the fake insurance agency, but called it a “sandbox” account to demonstrate the functionality of its artificial intelligence-powered platform works with Epic. At issue now is the fight within the fight—whether Applied can cut off Comulate from the AMS on June 30, which could be potentially devastating to Comulate since current customers of Epic, according to Comulate, have no ability to switch away from Epic; Applied controls the software development kit to migrate data from Epic; and Applied owns Ivans, the intranet for insurance brokers and carriers that every AMS uses.
“Not wanting to continue to authorize a competitor that resorts to fraud or deception in its business practices is a legitimate justification [to terminate Comulate],” said Shah. “Protecting Applied, and perhaps the market generally, from an actor that engages in that kind of conduct is likely of greater social value than the stability of Comulate’s contracts with its customers.”
Comulate said Applied has not shown any contract language to permit it from terminating Comulate’s access. “Here, a monopolist controls every input necessary to compete in this market and is unlawfully using that control to eliminate competitors,” said Comulate attorney Rollo C. Baker of Elsberg Baler & Maruri during the proceedings.