Celent’s Donald Light describes current insurance technology vendor M&A activity as “white hot,” as manifested in the topic of today’s IIR newsletter’s top story: Oceanwide Acquisition Gains Insurity Cloud, Configuration Capabilities.
Insurity’s acquisition of Oceanwide is similar to Majesco’s recent acquisition activity in that it makes a well-established core systems vendor even a stronger competitor in a limited field. This makes it harder for smaller vendors to compete unaided, but it also puts industry leader Guidewire on notice. As Light suggests, deep in the article, no player is immune to the need to keep innovating and executing.
The Insurity/Oceanwide deal also resembles Patriot National’s recent acquisition of Vikaran Solutions. While Patriot National is an outsourcer and third-party administrator, its solid financial backing as a well-capitalized, publicly traded company—Patriot made its initial public offering in Jan. 2015—makes Vikaran a more credible core system competitor. Insurity’s private equity backing does the same for Oceanwide, which will continue to operate under its brand name, with the appositive “an Insurity Company.”
The deal is also interesting as an example of the emerging capabilities which core system vendors must possess: between the two parties to the transaction, we see not only deep industry expertise and functional breadth in play, but also modern data capabilities—exemplified by Insurity’s Insurance Enterprise View, high configurability and cloud-delivery capability.