Deal Trends in General Insurance Policy Administration Solutions

2011 European Edition
by Catherine Stagg-Macey, August 24, 2011
Vendor Reviews
EMEA

Abstract

The general insurance policy administration solutions market is highly competitive. No single ven- dor more than 6% of the market.

A large number of vendors are chasing a limited number of deals. However, this does not appear to deter new capital from the market or foreign vendors expanding into Europe. Mergers and acquisitions continue in this sector, with a trend of consolidation. Roughly 20% of the vendor market in Europe changed ownership in the last four years. In a new report, Deal Trends in General Insurance Policy Administration Solutions, Celent looks at deals in the European vendor market and how they impact both the buy and sell sides.

“There is no 800-pound gorilla in this sector,” says Catherine Stagg-Macey, Senior Vice President with Celent’s Insurance group and author of the report. “The market is fragmented, with small players all chas- ing a limited number of deals. This increases the cost of sale for the vendors, and makes decision making more complicated for buyers.”

This report takes a look at the number of reported deals in the sector in the last two years and estimates deal trends for the next three years. It also discusses mergers and acquisitions over the last four years and projects where new interest and capital might come from in coming years. It finishes with advice for both insurers and vendors.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Overview

4

 

Differences in Insurer Buying Behaviors

4

 

Cautious Upward Trend

5

 

Report Methodology

5

Market Size Estimates

6

 

IT Spending by European Insurers 

6

 

Definition of Deal Sizes

6

 

Projecting PAS Deals

7

 

Implementations by Size of Insurer

7

 

Projecting Deal Value

9

 

Revenue Split

9

Vendor View

11

 

Small Players Fragment the Market 

11

 

Size of Vendor Client Base Market

12

A Morphing Market

14

 

Reflecting on the Past 

14

 

Next Phase of M&A

16

Conclusions

17

 

Advice for PAS Vendors 

17

 

Advice for Insurers

17

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

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