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Duck Creek Technologies (Bolivar, Mo.) and Apax Partners (London) are not wasting any time to deliver expanded capabilities with the acquisition of Agencyport. This acquisition is a great compliment of strategic digital capabilities to a leader in the core suite platform. So is this a new trend in the core space with other notable acquisition expanding in both the digital and data & analytics space or just coincidental?
Developing Comprehensive Solutions
SMA believes we are witnessing a mega trend in action. Modern core system providers are expanding their footprints toward digital and data and analytics. The expanding capabilities solution providers are making through acquisitions and the development of new product offerings prove that this trend is really happening. Insurers are acquiring, partnering, and building out capabilities on the distribution front end—and on the back end beyond transaction stores. From a competitive advantage viewpoint, as insurers integrate further into the digital world, it looks like providers are adjusting to provide comprehensive solutions.
It makes sense, of course, that we see more capabilities in core solutions that are pre-integrated and not duplicative or overlapping. Providing an end-to-end solution ultimately lowers the technical debt for insurers. The value proposition for insurers is strong, and it means there are more capabilities and services that a single vendor can provide.
As modern core systems have evolved, the platforms have become foundational for insurers on the transformation journey. Today, stand-alone portals require not only integrations with core systems and rating, but also create redundant data capture and processing. Having a portal tied directly to a core system—and leveraging the existing processing capabilities—not only eliminates the investment up front, but reduces duplicate maintenance.
A Trend with Staying Power
According to SMA research, 85 percent of insurers are investing strategically on improving customer experience through a variety of different initiatives. All have a focus on connecting with policyholders in self-service capabilities and improving investments for agents as well. At a tactical level, policyholder self-service for both personal lines and life are top investment areas, as are agent portals for commercial lines. When these all become digital, they provide the ability to interact in real time on any device. They also streamline the agent and policyholder buying and servicing experience.
SMA sees these strategic acquisitions in core as a trend with staying power. However, the key to all of these transactions is how the core system providers will move forward with the integration and prove that these capabilities, combined with the core system, can and will translate into improved time-to-market and reduced overall cost. That, of course, will determine the true impact of the modern core systems.