(Insurity’s headquarters in Hartford, Conn.)
The year 2020 has been a big one for core system vendor moves of all sorts including IPOs, major new investments and M&A. The latest news in this space is Insurity’s (Hartford) acquisition of CodeObjects. Looked at from one perspective, it’s the fifth acquisitions announced by the Hartford-based firm, the other four being SpatialKey in January, Epic-Premier in June, Virtual MGA in July, and Bill It Now in October. As important as all these may be, we took special interest in the most for two reasons: one is that CodeObjects was a pioneer in cloud-based insurance core suite technology. The other is that it gives Insurity a means of expanding its market focus from being almost exclusively aimed at commercial lines to now being also a dedicated personal lines system vendor. Two discuss the acquisition, IIR reached out to Michele Shepard, Insurity’s Chief Revenue Officer.
Insurance Innovation Reporter: Where does the CodeObjects acquisition fit within within Insurity’s M&A strategy. Let’s review Insurity’s recent acquisitions.
Michele Shepard, Chief Revenue Officer, Insurity: Our goal overall is to offer the most robust insurance platform in the industry. With our 2020 acquisitions, Insurity has made great strides towards becoming a powerhouse in data and analytics, extending its presence across the entire insurance ecosystem, and broadening its capabilities in new and current market segments to enable our insurers to grow and compete efficiently in the marketplace.
Taking a look at the individual acquisitions:
SpatialKey added geospatial analytics to our already robust suite of data and analytics offerings, further enhancing the value of our solutions and the actionable intelligence available to our clients.
Epic-Premier expanded our presence and solution offerings across the insurance distribution ecosystem—and in the growing MGA market in particular—and expanded Insurity’s addressable market.
Virtual MGA further expanded Insurity’s MGA offerings, expanded our presence in the London wholesale broker and syndicate E&S marketplaces, and solidified a leadership position in the MGA space.
Bill It Now extends our capability to address insurer and MGA needs across the policy lifecycle, and enables us to deliver greater value to clients.
CodeObjects substantially extends our ability to pursue and compete for personal lines business, significantly broadening Insurity’s addressable market. It introduces a powerful and proven AI technology-based solution into Insurity’s portfolio.
IIR: Is it fair to say that the CodeObjects is an acquisition of a different order of magnitude, as it converts Insurity into a core system/platform provider in both commercial and now personal lines?
MS: While we do have clients that use Insurity solutions for personal lines, commercial lines has long been our focus. CodeObjects brings to Insurity strong solutions purpose-built to address personal line needs, and the acquisition materially strengthens our ability to pursue and compete for personal lines business. In that regard, yes, our addressable market is increased by orders of magnitude.
IIR: CodeObjects was a pioneer in cloud-native core system technology with an end-to-end quasi-platform approach before the industry was even talking about that concept. When I heard about the acquisition, I thought that it was a great match between an underrated small vendor and a major core technology provider. What’s Insurity’s view of the complementarity of the two entities?
MS: We couldn’t agree more! Insurity is focused on cloud-based, highly-configurable, end-to-end solutions, so the CodeObjects development approach and solution set is a fantastic match. Insurity currently leads the commercial lines P&C market with over 250 cloud clients, and between our current market presence and our cloud platform which, we believe, offers the strongest SLAs in the industry, we are well-positioned to amplify the growth of the CodeObjects solutions, as well as Insurity’s market share across the industry.
IIR: Let’s discuss Insurity’s long-standing focus on the cloud and what it’s achieved in that regard, and then tell us about how that might also be an influence on the acquisition.
MS: This was a strong influence. As I mentioned, and to your point, Insurity is keenly focused on leading-edge cloud solutions, and CodeObjects’ technology platform is an important part of our assessment and due diligence process. The vast majority of our clients demand cloud-based solutions, and even our legacy, on-premise clients are migrating to the cloud at an increasing pace. With 15 of the top 25 US P&C insurers as clients, our cloud platform needs to be second-to none in terms of performance, security, and reliability, and insurers have become increasingly sophisticated in knowing what to look for during the vendor selection process. This has worked strongly in our favor, and we have amassed over 250 unique cloud clients—which we understand to be more than all our major competitors combined.
IIR: What does the CodeObjects acquisition mean for how Insurity plans to evolve, both as a personal lines system provider and more generally? Do you plan a technological assimilation that will ultimately shape all of Insurity’s offerings?
MS: With CodeObjects’ solutions as part of our portfolio, Insurity plans to aggressively pursue the personal lines market, though we will of course continue to expand our presence in the commercial market where Insurity has been a dominant player for decades. As to technological assimilation, our development teams have been hard at work integrating our solutions, with the goal of ultimately coming together as a single platform solution.
IIR: How will Insurity and CodeObjects work together. Will CodeObjects retain its branding for some time? What’s the plan?
MS: While we will be in a transitional period for some time, the CodeObjects team and brand will ultimately become fully-integrated with Insurity, and we will move forward as a single, unified organization.
IIR: Now that Insurity actively pursuing both personal and commercial lines insurer clients, how will that affect market strategy? How will it help to drive greater growth? What are Insurity’s long-term market ambitions?
MS: With CodeObjects’ solutions as part of the Insurity portfolio, we are now strongly positioned to pursue both commercial and personal lines, where we were previously focused on the commercial market. Up to this point, our personal lines business was opportunistic as opposed to resulting from a deliberate personal lines market strategy. Our addressable market has now increased by orders of magnitude. With the strength of our solutions, our cloud platform, and our market presence, we are well-positioned to accelerate Insurity’s growth and industry leadership.