Ace buys Chubb: what it means for insurance technology

Ace buys Chubb: what it means for insurance technology
Today’s blockbuster announcement of Ace buying Chubb will have a lot of industry ramifications—some of which will play out in the IT sphere. No doubt there has already been an IT assessment element in each insurer’s due diligence efforts. Between now and the effective date of the merger, there will be a lot of planning focused on:
  • Efficiencies and platform rationalization–aka “let’s figure out what is the right number of core systems, which core systems will be the survivors, and how data conversion and integration will work”
  • Cloud, SaaS, data management/stores, and analytics
  • Professional service and SI support capabilities that can scale to the new Chubb
  • Which systems will best support a digital roadmap
Some seemingly redundant systems may survive—at least over a 1 to 3 year period. For that to happen, the business (and/or various geographies’ compliance) requirements of the operating units using these system will be too divergent or too difficult to quickly build into a single surviving system. All this reinforces the reigning market message to insurance technology firms. If you want to be around in 10 years:
  • Design highly configurable and agile systems that feature ease of integration
  • Have enough scale to meet the needs of bigger and bigger insurer customers—grow, merge, or wither
 

IBM acquires Algorithmics

IBM acquires Algorithmics

Yesterday’s announcement by IBM, to acquire Algorithmics demonstrates the trend towards more concentration on the risk management vendor market. Algorithmics has been a successful IT vendor for many years taking advantage of new regulations such as Basel II and Solvency II to gain traction within the financial industry and IBM remains an IT infrastructure and core system development player benefiting from a strong reputation.

Following the mergers of Towers Perrin and Watson Wyatt to form Towers Watson and then the acquisition by the company of EMB, we think that the risk management vendor landscape is reproducing what is currently happening in the insurance policy administration system vendor market and we expect more concentration going forward.

For insurers working on Solvency II preparation programmes the merger of IBM and Algorithmics could be a great opportunity to consider a strong offering not only on the software side but also on the delivery aspects.

Accenture announces Duck Creek Acquisition

Accenture announces Duck Creek Acquisition
This is a great move for Accenture and Duck Creek. And it will create real benefits for global property & casualty / general insurers. Duck Creek brings its well regarded, modern, and highly configurable policy administration and rating systems to the growing Accenture Software unit. Duck Creek will benefit from Accenture’s global global insurance client base and relationships. Accenture Software’s current portfolio of product configuration, underwriting, claims, and policy administration will be strengthened by the addition of Duck Creek’s software, as well as by Duck Creek’s strong market acceptance in the past few years. Bringing one successful organization into another always brings challenges, but both groups have good people who should be able to recognize and work through the inevitable product and organizational issues.