At the centre of IMAN's infrastructure are IBM Power-based blade servers running Red Hat Linux. The PostgreSQL database is used for data storage and the Spring Framework and Hibernate were used to develop the core business application.

Sun JVM and JBoss are used to serve the Java application, and Pentaho is used for BI.

Other open source services include Zimbra for messaging, Alfresco for content management, Nagios for system monitoring, OpenVPN and FreeNX for remote access, and SugarCRM for marketing.

"Open source is a race of 250,000 runners and we are trying to bet on some winners," Braithwaite said jovially.

IMAN's application was custom developed by Polonious and is "specialized", but Braithwaite is adamant it could be applied to any business that involves claims and policies and is keen to offer it to the world as an open source product; however, that may not happen for another 18 months.

"Everything we need to know about running the business is in the menu and everyone can access it in real time," he said. "We've removed the problem of error-prone spreadsheets and personal assets that reside on the desktop. ASIC will move to an online auditing program and you can't do that if half of the data is sitting in spreadsheets."

Having build a modern application with open source components, Braithwaite is confident IMAN is in a unique position within the legacy-burdened health insurance sector.

"In insurance there are a lot of legacy systems, and a lot of mainframes in health insurance, many still have DECs and develop software in Cobol."

Braithwaite also praised his in-house developers and said if the company had contracted the project out to a big outsourcing firm it would have been a failure.

"I look at competitors spending $10 million and I wonder where the money goes," he said. "We looked at SAP and couldn't afford it, so we looked at Oracle and they wanted $500,000 on the table before they would talk. Off-the-shelf apps were too expensive and I wanted integrated reporting. In this industry reports are up to nine months old."

Braithwaite said representatives from other insurance companies "almost weep" when they see IMAN's infrastructure, which produced an ROI in 12 months.

The maintenance bill for open source software is around $200,000, which includes software upgrades and ongoing development.

Braithwaite estimates if the company was still using Access and spreadsheets and experienced the same growth of the past two years it would need another 12 staff.

"Other insurance execs have seen so much smoke and mirrors," he said. "SAP has good systems, but all they are interested in is your cheque book."

"The rest of the health industry runs on a margin of 4 to 5 percent and I don't want to be in that group. The application enables us to underwrite the risks and we only accept 40 percent of business offered, and you can't do that without real-time systems."