Insurance Software Development - M&A

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Mergers and Acquisitions - Insurance Software Development Market

Introduction

There have been several key mergers and acquisitions in the insurance software development market space in recent years. These included the acquisition of SpatialKey by Insurity, the acquisition of VUE by Vertafore, the merger of Athenium and Weather Analytics, and the $193.5 million acquisition of FAST by Verisk. In progress is the potential sale of Vertafore to a larger entity that has not yet been announced.

Insurity and Spatialkey

Vertafore and Vue

  • In May of 2019, insurance tech company Vertafore announced the acquisition of VUE Software.
  • The acquisition is an aim for Vertafore to complement their existing configurable solutions in order to create a more powerful insurer distribution platform.
  • VUE Software offers "configurable solutions to meet the unique needs of the Life and Annuity, Health, and Property and Casualty markets."
  • Specifically, Vertafore will use VUE's distribution technology to expand its suite of insurer solutions.
  • The acquisition will allow for increased operational efficiency, minimized risks, an upgraded distributor experience, and an organized distribution management life cycle.
  • The integration of the two platforms should also create faster agency onboarding.
  • Vertafore CEO Amy Zupon stated that, “VUE’s strong market position, momentum and laser-focus on modernizing insurance distribution make it a natural fit for Vertafore.”
  • Financial data on the merger does not appear to be publicly available.

Athenium and Weather Analytics

  • Insurance risk data management firm Weather Analytics acquired underwriting assessment software company Athenium in May of 2018.
  • The acquisition will allow Weather Analytics to expand its risk assessment data beyond weather data, and support their expansion of new decision-support software for insurers.
  • The integration will allow them to enable AI and computer-vision based assessment solutions.
  • The merging of Weather Analytics and Athenium will result in a combined entity called Athenium Analytics.

Verisk and FAST

  • In December 2019, leading insurance software company FAST was acquired by insurance data analytics provider Verisk.
  • FAST provides services focused around accelerating underwriting and claims processes, and is used by a wide range of life insurance providers.
  • Acquiring FAST will provide a channel for Verisk to provide additional innovative analytics features related to the underwriting process.
  • FAST software, which is used by a wide range of life insurers, also provides a channel for Verisk to deliver its innovative analytics to support straight-through underwriting.
  • While the Confidential Information Memorandum was not available, it was released that FAST was acquired for $193.5 million.
  • CEO of FAST, Tom Famularo stated of the acquisition, "As part of Verisk, we’ll be able to enhance our software, expand our reach, and provide robust analytics to meet the rapidly changing needs of life insurers and their customers.
  • The acquisition process focused on strategic relationship, financial performance, and growth opportunities in the market.

Vertafore Acquisition

Research Strategy

In order to provide details of merger and acquisition transactions in the insurance software development market space, we examined industry journals, market reports, PR releases, and insurance related media sources. We used these to hone in on mergers and acquisitions that fell specifically in the insurance software development market space. We also examined industry reports in order to determine whether either a Confidential Information Memorandum or further financial data was available on Verisk's acquisition of FAST, finding that few details had been made public around financials beyond the acquisition price. We also attempted to validate this by examining press releases and financial reports from Verisk, concluding that there is not a publicly available Confidential Information Memorandum.

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