sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Mergers and Acquisitions »
 Department of Telecommunications set to approve Idea-Vodafone merger – all you need to know
 Deals Of The Day-Mergers And Acquisitions June 18, 2018
 Deals Of The Day-Mergers And Acquisitions June 12, 2018
 Competition Commission of India may suggest structural changes in Walmart-Flipkart deal
 What you need to know about the Government’s new M&A rules for SMEs
 The Secret to a successful M&A valuation
 How Indian IT companies are trying to survive as outsourcing business declines
 How Indian IT companies are trying to survive as outsourcing business declines
 Times Group MD against further acquisition in telecom sector; fears it will limit consumer choice
 Deals Of The Day-Mergers And Acquisitions June 5, 2018
 All that you need to know about Idea-Vodafone merger

Report: M&A Flurry No Fluke
November, 26th 2009

It seems that announcements of mergers and acquisitions by insurance technology vendors are made daily, and a recent report by Novarica says this is not likely to change anytime soon.

In June 2008, Novarica predicted that M&A in the insurance software sector would continue, and the recent acquisitions of SceneGenesis by Mitchell, and McCamish by InfoSys proved them right. Also, with the purchases of EZ Data and Peak Performance by Ebix, and AgencyPort by Sword Group, Novarica says smaller, publicly traded companies are beginning to move more aggressively into this market, which has been dominated over the last few years by venture and private equity-[backed firms.

While analyst estimates vary, the general consensus is that U.S. insurers spend approximately $2 to $4 billion or more on industry-specific software applications per year, so its important insurers protect themselves.

Novarica suggests insurers understand which category their independent software vendors (ISV) are in, who is likely to buy them and why. For example, acquisitions of a Rising Star (an ISV entering the market with a new approach that will gain traction) or a Good Tech, Small Company (founder-controlled ISV that has a solid but not rapidly growing customer base) is likely to result in increased investment in the product, while acquisitions of stagnating product providers are likely to results in forced conversions or migrations. Insurers should protect themselves as much as possible through contractual means, including demanding base code escrow and service level guarantees that survive change of control.

M&A in the insurance industry can become complicated. Unlike other industries where a technical monoculture has evolved (e.g. banking, manufacturing), Novarica says, the insurance software market is highly fragmented by:

Size: with a few dozen insurers with more than $5 billion in premium revenue, another 100 or so with more than $1 billion, more than 300 with more than $100 million and close to 1,000 with less than $100 million.

Lines of business: with personal, commercial, specialty, workers comp, life, annuity, disability, health and other product sets all requiring different types of core software solutions.

Distribution model: with insurers who sell directly or use captive agents, independent agents/brokers and large brokers such as Aon, Marsh and Willis all having different needs.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions