Big Vendors Affirm Insurance Opportunity

As if to validate last week's Editor's Note, major horizontal vendors have demonstrated its introductory hypothesis, perhaps best summarized by the words of the notorious Willy Sutton. When asked why he robbed banks, Sutton famously replied, "That's where the money is."This week two major technology players made announcements about their intentions to beef up their insurance vertical presence with the acquisition of important insurance industry technology vendors. Yesterday HP announced it would acquire EDS, and Oracle said it is buying up-and-coming, new-technology policy management software vendor AdminServer.

Taken together with Versata's announcement last week that it would acquire Clear Technology, this latest round of M&A is probably the most significant spate of insurance technology vendor consolidation since 2006, which featured deals such as IBM/FileNet and ChoicePoint's acquisition of ePolicy and Insuratec.

These deals demonstrate recognition on the part of large horizontal players that they believe there is still great potential for sales in the insurance industry, says Craig Weber, Celent senior vice president and insurance practice leader. "For big players such as Oracle and HP to make a commitment in the insurance industry shows that they are willing to verticalize their offering and that they believe that there's a long-term play in the industry."

In that respect, while their methods may differ from Mr. Sutton's, they share his insight on the opportunities presented by the financial services industry, and in this case, the insurance vertical in particular.As if to validate last week's Editor's Note, major horizontal vendors have demonstrated its introductory hypothesis, perhaps best summarized by the words of the notorious Willy Sutton. When asked why he robbed banks, Sutton famously replied, "That's where the money is."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio