North American Insurance Software Deal Trends, Property/Casualty Edition

by Karen Monks,  Michael Fitzgerald, May 14, 2012
North America

Abstract

Insurance deal activity slowed in the segment, but some vendors are seeing successes.

In a new report, North American Insurance Software Deal Trends 2012, Property/Casualty Edition, Celent analyzes deal data provided by software vendors active in insurance in North America. A close look at 2010 and 2011 deals that fall into each metacategory and subcategory shows that, although 2011 showed signs of an improved economy, insurers continued their slow rate of investment in external software. Overall deals for property/casualty software were down, but a like-on-like comparison to last year’s results shows that some vendors were successful despite the slow market.

The report breaks down deal activity by carrier size, type of deal, four broad metacategories (core processing, distribution, infrastructure and financial, and document/content management), and a number of subcategories. Data from previous Deal Trends reports are used to look at longer-term trends, and leading vendors for each metacategory are identified.

Based on vendor-provided data, the report also names leaders in the Celent Traction Index, which is an indicator of which companies are finding success in the insurance vertical.

“Continued investment in core systems renewal was clearly reflected in the property and casualty deal data,” says Mike Fitzgerald, senior analyst with Celent’s Insurance group and coauthor of the report. “Insurers are feeling market pressures from consumers to deliver functionality such as web inquiry and electronic document presentment. Hence,updated core systems have moved from a nice-to-have to table stakes.”

“Our 2012  report shows that overall deal activity among P&C insurers slowed last year. Activity in the first quarter was reduced after three exceptionally strong quarters in 2010.,” says Karen Monks, analyst with Celent’s Insurance group and coauthor of the report. “Insurers picked up their software purchases as 2011 progressed, but the total for the year did not equal the numbers seen in the previous two years.”

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 part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

 

All Deals

3

 

Property/Casualty Deals

4

Introduction

6

 

Methodology

7

 

Scope

7

 

Limitations

9

 

Categories Used

9

 

Carriers Tiers

12

Overview

13

 

Deals by Subcategory

14

 

Deals by Carrier Size

17

 

Life/Annuity, Health, and Property/Casualty

18

 

Customer Type

18

 

Deal Size

19

 

Deployment Methods

21

 

Measures of Insurance Traction

21

 

Traction Leaders

22

Continued Economic Uncertainty

24

 

The New Normal: Year 3

24

 

Insurance Software Purchasing Trends

24

Property/Casualty Results

26

 

By Metacategory and Quarter

26

 

By Size and Metacategory

27

Metacategory Leaders

28

 

Distribution

28

 

Document/Content Management

29

 

Infrastructure and Financial

30

 

Core Processing

30

Conclusions

34

Appendix: Vendors Included in This Report

36

Leveraging Celent’s Expertise

38

 

Support for Financial Institutions

38

 

Support for Vendors

38

Related Celent Research

40

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