Insurance software market set for consolidation

International

The global insurance software market currently estimated to be worth around US$10bn annually is expected to more than double over the next five years as significant consolidation takes place in the market. In a recently released report the US based financial services research and advisory consultancy, Celent LLP notes that there are over 150 firms serving the insurance market in the US alone. Celent believes that the industry is ripe for consolidation. Matthew Josefowicz, manager of Celent’s insurance group and lead author of the report, explains that consolidation in the insurance software industry is nothing new. “What is new is that the dot-com/post-Y2K hangover has finally lifted and that significant new players are about to make themselves felt in the market, which was long the exclusive provenance of the ‘big four’- CSC, Fiserv, SunGard, and CGI.” Celent expects the most active sector to be property and casualty policy administration and claims. Other sectors will include billing, life policy administration, illustrations, business intelligence, and possibly document management. Celent also expects substantial acquisitions in Europe and China. There are over 30 policy administration software vendors in Europe, but Celent notes that few have more than 10 clients. “We’ve already started to see acquisitions in this market.” By 2011, Celent expects the insurance software market to look significantly different. SAP will become a major player, CSC is likely to have new ownership, and at least one Indian firm will have bought itself a significant market position. “Many of today’s smaller players will be rolled up, hunkered down in protected niches, or gone,” says Catherine Schmitt, senior insurance analyst in Celent’s London office. ‘ The Coming Wave of Consolidation in Insurance Software’, 118pp, Celent LLP. Contact info@celent.com for more information .