Last year, Guidewire
announced InsuranceSuite 8, a newer version of its insurance platform for
property and casualty (P&C) insurers. It provides a comprehensive
application set that supports insurance providers’ core business operations,
such as underwriting, billing, and claims management. The new suite also
simplifies the replacement of legacy core systems with modern software and
helps insurers transform business operations. Additionally, this new suite
comes with a major functionality called “Service Tiers”, which customizes the
customer service experience of the policyholders across different functions.
This will help the insurers in reducing the customer interaction timings,
enhancing the customer services experience and eventually minimizing costs.
InsuranceSuite 8 will serve
as a revenue catalyst for the company in the P&C software industry. The
P&C software industry is estimated at $6 billion with around 90% of the
insurance companies still using outdated legacy core systems. Thus, potential
for growth in this industry is high. Further, the P&C insurance companies
will increase IT spending in 2014, resulting in an increase in the deployment
of P&C software modules this year.
Guidewire, with its wide
range of products, should benefit from this spending increase. Guidewire had
158 customers as of October 2013, out of which only 34 used the company’s full
insurance suite. InsuranceSuite 8, with its improved features and additional
capabilities, will help increase the adoption of full suite by existing customers
as well as attract new customers. InsuranceSuite 8 will also help Guidewire in
consolidating its leadership in the North American market against Accenture
(ACN). Accenture is another major player in the industry that provides full
insurance offerings through its Duck Creek Suite. It has emerged as major
threat to Guidewire in North America, especially in attracting customers with
more than $1 billion down written premiums (DWP).
International customer base
is growing
Guidewire added seven new
customers in the second quarter. On December 20, the company announced that
Radian selected its InsuranceSuite platform for insurance underwriting, policy
monitoring, claims management, and billing for its mortgage insurance
subsidiary, Radian Guaranty Inc. Guidewire also added AIG Japan, Intact
Financial Corporation, Tokio Marine & Nichido Fire Insurance Company
Limited, Tinkoff Online Insurance, Amerisure Mutual Insurance Company, and
American Modern Insurance Group under its client base.
A key take away from the
recent customer additions is that three out of the seven customers are from
Europe and Asia. Currently, the company’s revenue is skewed towards North
America. The company is generating approximately 70% of its revenues from this
region. The recent addition of international customers indicates that the
company’s products are gaining traction in other regions as well and will help
the company to diversify its revenue production. Apart from that, the growing
visibility of the company’s solutions in international markets will help the
company attract new customers.
Data management solutions
gaining traction
Guidewire introduced data
management and business intelligence (DM & BI) solutions in June 2013,
after acquiring Millbrook Inc. On December 18, 2013, Guidewire released newer
versions of its DM & BI solutions, Guidewire DataHub 8 and Guidewire
InfoCenter 8. Implementing data management solutions during core system
transformation has its advantages. It makes it easier for insurance companies
to map and convert the data into new core systems as both are deployed
simultaneously. As a result, these solutions will accelerate the transformation
of legacy core systems to modern core systems.
Another advantage with
Guidewire is that it offers end-to-end software solutions to insurance
providers. Insurance providers prefer to implement data management solutions at
the time of transformation because it gives them a competitive advantage over
other pure-play data management solution providers, which do not offer the
insurance software modules. End-to-end solutions from one company will help
insurance providers align their insurance suite and data warehouses. These
advantages offered to insurance providers will help Guidewire attract customers
for its data management solutions.
Conclusion
During 2014, Guidewire will
produce strong results as insurers replace the outdated legacy core systems.
Also, new clientele additions from the international markets will increase the
visibility of company’s solutions outside North America. Finally, the company’s
data management solutions will benefit from increased spending by insurance
companies on big data and analytics.
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