Even before the ball dropped to signal the start of 2017, it seemed
obvious this year would be a wild ride. For those following the moves
of our leading technology solution providers, it was difficult to keep
up as mergers and acquisitions moved at a pace not seen for years.
Throw in the influx of insurtech companies, the already
crowded core-solutions market, and the threat of major technology companies hanging over the heads of everyone in the industry—solution providers and insurers—and there were more
than enough issues to keep us thinking for months.
ITA Pro decided to take the discussion to the technology
solution providers themselves. Over the next several pages
you will read the thoughts of Marcus Ryu, CEO of Guidewire;
Jeffrey Glazer, CEO of Insurity; Mike Jackowski, CEO of Duck
Creek; Roni Al-Dor, CEO of Sapiens; and three members of the
Majesco team, CEO Ketan Mehta, COO Ed Ossie, and Denise
Garth, senior vice president of strategic marketing. We hope
you find their responses to our questions illuminating.
ITA: Mergers and acquisitions have been a con-
stant in the insurance IT world for many years,
but activity has escalated in the last 12 months.
What has been the thinking within your com-
pany on all the recent
M&A activity and will it
continue at this pace?
MARCUS RYU: There always
will be cases where companies
come together to provide a more
unified offering. This has been
an active period and Guidewire
has been significantly more active
in that we did three deals in one
year. To put that in context, we
went 12 years without a single
acquisition; then we did one, our
first; and then we went three more years with nothing. It was
an anomalous year for us and you shouldn’t expect to see us do
anything like that in the next year. It just so happened a couple
of buses got to the station at the same time.
There are more sources of capital that make transactions
possible. Private equity firms are interested in the insurance
services and the technology space, which has been a high
performer for them and helped motivate the number of trans-
actions. There’s also a great deal of emerging technology in the
market. Much of it is sub-scale for a standalone company, but
could fit in well with a larger organization. Two of the acqui-
sitions we made, FirstBest and EagleEye, were doing distinct
things, but it was difficult for them to get to scale. We think we
can do more with them now that they are part of Guidewire.
The purchase of ISCS was different in that it was a smaller
company than Guidewire. We are excited about them joining the
Guidewire organization. Early indicators are it is being received well
by our customers, their customers, and those that observe the industry. The basic logic is looking at the market requires two different
kinds of core solutions. We have InsuranceSuite that is modular and
flexible, it’s internationalized, and scalable for high volumes. The
ISCS offering, which we are now calling InsuranceNow, is all-in-one,
delivered in the cloud, implemented
in a more standardized fashion than
InsuranceSuite, and is more adaptive
to the needs of a smaller carrier. Our
belief is that by having both kinds
of offerings we can better serve the
totality of the market.
RONI AL-DOR: We have been
active in the M&A space since 2010
and we expect the pace of deals
to grow to meet two important
demands. First, vendors must be
big to effectively service this space. Marcus Ryu Roni Al-Dor