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A Good Day for Guidewire, for the Insurance Software Sector, and for Insurers

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25 January 2012
Donald Light

Today’s IPO for Guidewire is important for Guidewire, the insurance software sector, and for insurers that buy new software.

For Guidewire the IPO will provide access to public equity markets and working capital—as well as funding additional internal development in its products and technology. As Guidewire is now a publicly traded company, its customers and prospects will have more visibility into its financial status.

For the insurance software industry, the IPO highlights the importance of modern software as an enabler of growth and competitive advantage for property/casualty insurers facing a tough global economic environment.

The listing may also attract more investor interest from private equity, venture capital, and institutional investors in the entire insurance software sector.The very active run of acquisitions and spin-offs we’ve seen for the past 18 months will continue, and perhaps accelerate.

A higher profile among investors and more money invested will make the insurance software sector stronger and more competitive, and should lead to more innovation and value delivered to its customers, the insurers.

Comments

  • When many corporations go public, you also tend to see an exodus of talent after they are able to cash in on the rewards. This does have an impact on the sustainability of many products in the marketplace and would require Celent to not just understand the macro characteristics of Guidewire as a vendor, but also the micro characteristics of their employees...

  • [...] visibility to the insurance software industry, which could increase private equity activity, argues Donald Light, a Palo Alto, Calif.-based senior analyst with [...]