Ace buys Chubb: what it means for insurance technology
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1 July 2015
Today’s blockbuster announcement of Ace buying Chubb will have a lot of industry ramifications—some of which will play out in the IT sphere. No doubt there has already been an IT assessment element in each insurer’s due diligence efforts. Between now and the effective date of the merger, there will be a lot of planning focused on:
- Efficiencies and platform rationalization--aka “let’s figure out what is the right number of core systems, which core systems will be the survivors, and how data conversion and integration will work”
- Cloud, SaaS, data management/stores, and analytics
- Professional service and SI support capabilities that can scale to the new Chubb
- Which systems will best support a digital roadmap
- Design highly configurable and agile systems that feature ease of integration
- Have enough scale to meet the needs of bigger and bigger insurer customers—grow, merge, or wither
Very rightly said - Grow, merge or wither.
The insurance sector has always been at the center of merger and acquisition spree. Of course the scale of this merger is huge. As always, at the time of any M&A activity, the focus is on what systems are in use in both the organizations and which of these lend themselves to a longer life span based on adaptability, configurability, performance, user interfaces and ease of use. In case of insurance sector, the focus also shifts towards the financial reporting and compliance aspects of these systems. All of these factors determine the duration for which these systems continue to run in parallel before one of them gets sunset. In my experience, I have seen these systems surviving for much longer periods because of some very specific challenges due to which the policy or the claim data is highly difficult to be transferred over into the new system of choice. But that keeps on adding to the unnecessary cost of operation.
For a merger this size, and the policy data which spans over so many decades, it will be an interesting challenge to see final roadmap.