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Insurity (Hartford), a provider of core insurance processing, data integration and analytics solutions, announced today that it has acquired Systema Software (Larkspur, Calif.), vendor of the SIMS Claims system. Insurity casts the deal as the latest manifestation of a strategy directed at serving the variable needs of P&C insurers. Systema is Insurity’s third acquisition within two years, following Oceanwide in May 2015 and Tropics in June 2016. Insurity says it will continue to sell the acquired system under the SIMS Claims name, though Systema will now operate under the Insurity brand.
“SIMS Claims is a well-regarded claims solution,” comments Donald Light, a Director in Celent’s North America Property/Casualty Insurance Practice. “This is an important step forward in Insurity’s strategy to grow both organically and through acquisitions.”
An Insurity statement on the acquisition describes SIMS Claims as a fit-for-purpose solution currently deployed by a broad set of insurance carriers and other entities. Insurity will benefit from the vendor’s special strength in the alternative market space, among self-insured organizations, third-party administrators, and insurance pools. Insurity says that it will also gain claims and Microsoft technology expertise, as well as a reinforcement of its “culture of agility and flexibility” with the Systema team.
The acquisition represents Insurity’s ongoing strategy to add to its system portfolio in ways that address the differing needs of insurers, according to Lani Cathey, SVP, Sales & Marketing, Insurity. “We have made good on our commitment to continue to invest in our core suite and our position that ‘one size does not fit all’ when it comes to insurance systems,” she says. “Carriers are unique, therefore platforms need to meet their unique requirements.
There is room in the market for both Insurity’s existing Claims Decisions offering and SIMS Claims, Cathey insists. “We’re excited to expand our reach to alternative markets and we also like the culture and people of Systema and feel it’s important to keep that intact,” she says.
Meeting the Demands of Several Market Segments
“Insurity has continued to be aggressive in its acquisition strategy to meet the demands of several active market segments,” affirms Karen Furtado, a partner at research and advisor firm SMA (Boston). “Systema’s functionally rich system has served the industry well, with substantial growth in the MGA, specialty markets and alternative insurance market.”
The acquisition represents a “tremendous opportunity” for Insurity to expand its reach and provide its existing clients with more service, delivery and software options, according to Jose Tribuzio, CEO, Systema Software. “Our product team remains dedicated to cultivating SIMS Claims as a premier claims solutions, backed by the superior level of support on which our customers have come to expect and rely. By joining Insurity, we will now have more to offer our clients and more resources to support our solutions.”
Until now, Systema has enjoyed strong growth through a combination of factors, according to Brian Mack, VP, Sales & Marketing, Systema. “We have a lot of out-of-the-box functionality combined with flexibility, which allows us to implement on a tighter time frame—and by doing so deliver on a good value basis,” he comments. “The market has looked upon that favorably over the last two or three years and we’re confident it will continue to do so going forward.”
Insurity’s acquisition will help to secure that prediction because of the ways it addresses two of insurers greatest concerns, according to Mack. The first is financial strength. “In addition to the insurance expertise at Insurity, we’re also able to tap into its financial resources,” he elaborates. “Frankly, there are still organizations in the market that have a litmus test for the size of vendor they’ll work with.”
The second obstacle Systema has faced is insurers’ current preference for integrated core system suites. “We started to run into roadblocks in that regard and had to ask how we would be able to continue to grow,” Mack says. “We found ourselves looking at options, and Insurity lined up to be a perfect marriage.”
The End of the Independent Component Vendor
Systema’s gain may be a loss for other industry players, according to Matthew Josefowicz, president and CEO of research and advisory firm Novarica. “SIMS is probably the last best independent claims system, so things just got a lot worse today for any policy administration vendor that needs one,” he comments. “Not having a claims system puts core systems vendors at a serious disadvantage during the sales cycle.”
“The day of the independent component vendor is essentially over,” Josefowicz declares. “Anybody who doesn’t ‘suite-up’ after they have one or two proof customers is going to have trouble scaling.”