January 2021 – This brief examines market dynamics in M&A activity in the insurance software space from the perspective of the potential effect on insurer technology strategies.
The insurance software space is the focus of investor attention due to several recent IPOs, private equity investments, and strategic acquisitions by major tech and data firms. The venture-driven activity in the adjacent InsureTech marketplace has also drawn interest to the space.
For insurer technology leaders, understanding the dynamics of the market and how current or potential partners are likely to fare is an important part of any comprehensive enterprise technology strategy.
Key Points and Findings
- Dominant insurance software vendors are solidifying their position via M&A, either via IPO or PE funds, but history shows it is possible for new or outside players to challenge the leaders.
- The fragmented nature of insurance means growth depends on breadth. Large software players must continually expand their offerings, making M&A a feature of the vertical.
- Insurer technologists should prepare for change in their key vendors’ strategies and teams, as buyers incorporate new products and sellers incorporate new leaders. Insurers should understand the strategic position of their key vendors and game out various scenarios.
About the Author
Datos Insights
We are the advisor of choice to the banking, insurance, securities, and retail technology industries–both the financial institutions and the technology providers who serve them. The Datos Insights mission is to help our clients make better technology decisions so they can protect and grow their customers’ assets.
Other Authors
Steven Kaye
Steven Kaye is Head of Knowledge Management at Datos Insights, and lead editor of the firm’s Business and Technology Trends in Insurance series. He has managed a wide range of research projects since joining the firm in 2008. Previously, Steven worked for Accenture as an insurance researcher focused on the U.S. life and property/casualty markets. He also served in both knowledge management...
Datos Insights
We are the advisor of choice to the banking, insurance, securities, and retail technology industries–both the financial institutions and the technology providers who serve them. The Datos Insights mission is to help our clients make better technology decisions so they can protect and grow their customers’ assets.