In a transaction that further defines the market roles of both buyer and seller, Hartland, Wis.-based AQS acquired AscendantOne from ISO Insurance Technology Solutions, a unit of Insurance Services Offices (ISO, Jersey City, N.J.) in early November. Though the vendors decline to disclose the terms of the deal, it encompasses assets and corresponding personnel of the AscendantOne Policy Management Suite, which will be rebranded as AQS Access.
The acquisition reverses ISO's foray into the policy administration systems vendor role, which the company took on with the 2003 acquisition of then start-up AscendantOne in response to long-term demand form its customers, according to Frank Coyne, ISO's chairman, president and CEO. While the deal narrows ISO's focus, it broadens AQS' offerings to give P&C customers the option of greater self-service through the "rules-and-tools" capabilities of the AscendantOne solution and its associated rate management capabilities, and also expands AQS' reach into the personal lines insurance sector. As part of the transaction AQS obtains the tools used to maintain the ISO Rating Service software, while ISO retains ownership of ISO Rating Service and will continue to maintain and support the advisory loss costs, rules and forms contained in ISO Rating Service, according to an AQS statement.
"Up until this point in our history, AQS has provided commercial lines administration products and services for carriers whose preference was to source the lion's share of product implementation work, development, support and maintenance to us," says Dave Kerford, CEO, AQS. "This acquisition allows us to also offer carriers a self-service option, enabling them to have the level of control they desire and to have the option to reach self-sufficiency more quickly."
AQS gains several customers of the ISO Rating Service and the AscendantOne policy suite, as well as deep personal lines subject matter expertise, according to AQS chief marketing officer Bruce Davis. "Through our association with ISO, we benefit from the availability of prebuilt personal and commercial lines content through the ISO Rating Service that powers natively the AQS Access personal lines and commercial lines product suite," Davis explains. "Personal lines is now a core offering for AQS, and we will support those lines as completely as we do commercial lines."
Adding the capabilities of AscendantOne gives AQS the potential to offer clients the option to standardize on one platform for both personal and commercial lines.
"It may have taken AQS too long to develop the templates that they needed to do this, so buying assets from another vendor established in personal lines made sense," comments Stephen Forte, research director, Gartner (Stamford, Conn.). "It could be a good thing to round out their portfolio to enable personal and commercial lines on a single platform, similarly to the strategy that Insurity [Hartford] pursued a few years ago."
The acquisition will also likely elevate the AscendantOne solution's capabilities, which need some overhaul to become competitive, according to Chad Hersh, an analyst with Novarica (New York). "It's a much easier job than overhauling the current AQS system to incorporate the ISO Rating Service, and to add rules and tools," he says.
Selling AscendantOne also unburdens ISO of the "schizophrenic" position of simultaneously offering a policy administration system based on the ISO Rating Service while touting that service to AscendantOne's competitors, Hersh adds. "This deal frees them to simply focus on what they should be focused on -- providing data to carriers."
Hersh's characterization resembles that of ISO's EVP and COO, Scott Stephenson, who says the sale reflects the vendor's decision to focus on the provision of accurate and timely rate books. "ISO intends to remain focused on its role as the leading provider of data and analytics to the P&C insurance industry," he reports. "We are engaged in developing families of new products ranging from predictive models for the rating of policies, to the harvesting and analysis of telematics data, to advanced analytics to root out fraud in claims workflows."
The ISO Rating Service remains a prime focus of the vendor's strategy, accompanied by ISO's IntegRater product and its manuals, according to Stephenson. "We continue to provide our advisory rating content in multiple formats for our customers to decide which represents the best mode for them," he says.
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