Insurance Software Development - Competitive Landscape

Part
01
of two
Part
01

Insurance Software Development Market (2)

Seven of the competitors to Management Data & Insurance Administrators, Inc. are Accenture Life and Annuity Software, Oracle Insurance, Sapiens, Majesco, Equisoft Inc., LIDP Consulting Services Inc., and QLAdmin Solutions.

Accenture Life and Annuity Software

Oracle Insurance

  • Oracle offers insurance solutions for life and annuity, which includes policy administration, distribution management, analytics and reporting, customer services and digital engagement, and wellness platform.
  • Oracle Financial Services Software Limited, in which Oracle Insurance belongs to, generated an income of ₹49,589.03 million for FY 2018-19, or approximately $695.85 million.

Sapiens

  • Sapiens offers the Sapiens Platform for Life & Annuities, a holistic policy administration platform for L&A providers that consists of a core suite, advanced analytics, and full digital suite.
  • Sapiens International Corporation reported a revenue of $289.71 million for FY 2018.

Majesco

EquiSoft, Inc.

LIDP Consulting Services, Inc.

  • LIDP Consulting Services, Inc. offers administration systems for traditional and non-traditional life, health, and annuity insurance products. Their main offerings are The Administrator and The Administrator Titanium Edition. Both systems include contract & policy, reporting, and product tools to create or enhance life, health, and annuity products.
  • The company generates an estimated annual revenue of $17.6 million.

QLAdmin Solutions

Additional Findings

The following companies have also been mentioned in several market reports on life insurance policy administration systems, and they develop policy administration software for L&A providers. Therefore, they are also competitors to Management Data, Inc.

Research Strategy

To provide five competitors to Management Data & Insurance Administrators, Inc., we started our research by looking into the tech directory company listings of the life insurance and financial services industry provided by the client. We then individually looked into each of the companies in the directory, analyzed their offerings, and listed those who develop policy administration and reporting software specifically for insurance (life & annuity) companies. We found seven companies that meet the said criteria, and these companies are Accenture Life and Annuity Platform, EquiSoft, Inc., LIDP Consulting Services, Inc., Majesco, Oracle Insurance, Sapiens, and QLAdmin Solutions. We then looked for the market share of each of these companies; however, even after exhaustive research in the public domain, we could not find such information. Therefore, we used their annual revenue as the metric to show their share in the market. We used annual reports to find their revenue information; and for the companies whose annual reports are not publicly available, we used databases of private companies such as Crunchbase and Zoominfo. For companies that have several business segments, such as Accenture and Oracle, we used the figure of the business segment where the policy administration development belongs to and not of the whole company to provide a more accurate revenue comparison.

To make our findings more comprehensive, we also looked into several global market reports on life insurance policy administration systems. We collated all the companies listed as top market players across these reports and removed those that have been mentioned in our initial findings. For the remaining companies, we then individually checked each of the company's website to ensure that they develop policy administration products or platforms for L&A providers. Through this strategy, we found six more companies that are competitors to Management Data, Inc., and these are InsPro Technologies LLC, DXC Technology Company, Infosys Limited, Capgemini, EXL Service Holdings Inc, and Andesa Services. We included them as additional findings and linked them to the page where they talk about their policy administration development services for L&A providers.
Part
02
of two
Part
02

Regulatory Issues

Insights surrounding regulatory issues that have to do with third-party policy administration and reporting software companies include compliance with the United States' Cloud Act, compliance with the Consumer Data Privacy legislation and regulations to curb mergers of technology companies. These insights are however not specific to third party policy administration and reporting software companies but they are on the entire financial services sector software companies in the United States and third party policy administration and reporting software companies are part of this sector.

Compliance to the Cloud Act

  • 'The Cloud Act' which is also known as the 'Clarifying Lawful Overseas Use of Data Act' became law in the United States in 2018. The law requires that all technology/software companies in the United States provide any data stored in their systems whenever it is required by the government. This law was initially enacted to enhance the FBI's data search operations and the law makes criminal any acts that deliberately hinder the government from accessing the required information.
  • A wide range of insurance companies in the United States is turning to cloud technology for providing insurance services because it reduces operating costs while increasing the efficiency of operations. However, this shift requires that insurance companies put in place effective data privacy mechanisms to safeguard client information.
  • The National Law Review outlines conditions under which a company may be exempted from availing required data as stated in the Cloud Act. One such condition is when the need for justice supersedes the need for access to data.
  • Financial institutions and their software providers are now revising their data privacy policies to comply with this act. However, these institutions are seeking legal advice on how to challenge some clauses in this act.

Consumer Data Privacy

  • The Federal Trade Commission (FTC) is mandated to enforce all legislation relating to consumer data privacy in the United States. Several acts have been enacted with respect to consumer data privacy: The American Data Dissemination Act, The Social Media Privacy Protection and Consumer Rights Act, The Digital Accountability and Transparency to Advance Privacy Act, The Commercial Facial Recognition Privacy Act, and The Information Transparency and Personal Data Control Act.
  • The frequency of data breaches in the US and globally is on the rise and it is badly affecting insurance and several other industries. Reports indicate that the cost of data breaches rose by about 1.6% in 2018 and has risen by close to 12% since 2015.
  • The FTC does not have specific guidelines for the insurance industry but its regulations for the financial services sector players are applied to the insurance industry and cases of data breaches are reported to this commission where relevant actions are taken against offenders.
  • Cyber Security Hub reports that software companies that have the capacity to comply with this legislation are using it to get a competitive advantage over companies that lack the capacity to comply. The report further indicates that this legislation favors big software companies like Microsoft who are now applying it worldwide.

Regulating Technology Company Mergers

  • Joe Simons of the FTC said big tech companies like Facebook are killing competition by making it difficult for small tech companies to survive in this industry. The big tech companies use their financial strength to acquire the small tech companies and one such case is Facebook's acquisition of Instagram in 2012.
  • In 2018, Google and Amazon expressed interest in venturing more directly into the insurance industry and these proposals have shaken the small companies in this industry.
  • Big software companies have devised ways to evade the anti-merger regulation, for example, by acquiring companies that are not direct competition. Facebook's acquisition of Oculus is an example of a merger that evaded the anti-merger regulation.

Research Strategy

To determine insights surrounding regulatory issues that have to do with third-party policy administration and reporting software companies, your research team's first attempt was to search the Insurance Journal though this journal addresses all issues affecting this industry. This information was not found here due to the possible reason that most insurance studies focus on the industry as a whole. Our second attempt was to search the United States' Federal Trade Commission (FTC) website for this is the body mandated to overall business operations in the US. The FTC did not have much information specific to third party issues and we thought this is because FTC does not have industry-specific guidelines for the insurance industry. Our final attempt was to get this information on the Information Technology Industry Council website for this contains much information on the tech companies in the US and worldwide but this was not found here either. It is possible that the council has only researched on broad industry issues and not specifics like third party issues. Therefore, the team opted to use information that was affecting the entire insurance industry as third party would be implied therein.

Sources
Sources

From Part 01
Quotes
  • "EquiSoft has $34.6M in estimated revenue annually."
Quotes
  • "Our Insurance industry group serves property and casualty insurers, life insurers, reinsurance firms and insurance brokers. This group represented approximately 30% of our Financial Services operating group’s revenues in fiscal 2019."
  • "Financial Services • Banking & Capital Markets • Insurance"
  • "Financial Services Revenues Fiscal 2019 $8,493,819 (in thousands of US dollars)"
Quotes
  • "LIDP Consulting Services has $17.6M in estimated revenue annually."
Quotes
  • "The Sapiens Platform for Life & Annuities offers excellence in the administration of the insurance business and creates greater efficiency via legacy consolidation. The platform is comprised of a core suite (including illustration, underwriting and eApp); advanced analytics and a full digital suite."