Yesterday’s announcement by IBM, to acquire Algorithmics demonstrates the trend towards more concentration on the risk management vendor market. Algorithmics has been a successful IT vendor for many years taking advantage of new regulations such as Basel II and Solvency II to gain traction within the financial industry and IBM remains an IT infrastructure and core system development player benefiting from a strong reputation.

Following the mergers of Towers Perrin and Watson Wyatt to form Towers Watson and then the acquisition by the company of EMB, we think that the risk management vendor landscape is reproducing what is currently happening in the insurance policy administration system vendor market and we expect more concentration going forward.

For insurers working on Solvency II preparation programmes the merger of IBM and Algorithmics could be a great opportunity to consider a strong offering not only on the software side but also on the delivery aspects.