SEG Acquisition Elevates MajescoMastek as Policy Adminstration System Provider

Already small compared to the range of P&C offerings, the market of available modern life insurance policy administration systems got smaller at the end of 2010 with New York-based MajescoMastek's acquisition of SEG Software (Glastonbury, Conn.). This may be bad news for insurance CIOs and procurement executives who will have one less source of vendor proposals, but it should be good news for current SEG customers, life insurers seeking modern policy administration options and the parties to the acquisition.

"The acquisition of SEG by MajescoMastek catapults a sizeable company into the position of having a modern system in a market where there are few modern options," opines Chad Hersh, director of Novarica's (New York) insurance practice. "The SEG system, which had languished under the limited R&D budget of a small company, should now have the opportunity to flourish with the benefit of the resources of a company like MajescoMastek."

SEG offered the market a complete application software package for all lines of health, annuity and life insurance products, including group life. The solution features a rules engine that includes all the product attributes, actuarial calculations, regulatory logic and business processes required for U.S. carriers to administer business, according to published vendor descriptions. And the technology's configuration capabilities allow non-IT professionals to customize base rules, enabling greater product speed to market, among other benefits.

Novarica's Hersh contends that only a few genuine configurable life insurance policy admin systems have been actively sold in recent months, namely the Accenture Life Insurance Platform; Cardiff, U.K.-based FIS Software's ALIS product; and Wyde's (Eagan, Minn.) Wynsure system. "Most insurers are aware of these solutions but had forgotten about SEG," Hersh asserts. "Having a familiar name like MajescoMastek acquire the assets of a solution provider whose viability was questionable should impact the overall landscape significantly."

According to MajescoMastek, the acquisition reinforces its commitment to the North American insurance market and provides the means to expand its presence and capabilities in the life and annuity policy administration arena. A statement issued by the vendor says the SEG acquisition will accelerate the delivery of MajescoMastek's Elixir policy administration solution and complement the existing Elixir brand of solutions, which include Elixir NB+U for new business/underwriting and Elixir Distribution Management.

MajescoMastek timed its acquisition well, suggests Ellen Carney, senior analyst, Forrester Research (Cambridge, Mass). With stock portfolios performing better, the life insurance sector has been revitalized and is more comfortable about exploring new policy administration solutions, but it has limited options, she says, adding, "This is a market looking for choice." And now that SEG's viability is less of a factor, insurers are likely to take interest in what the solution has to offer, according to Carney.

SEG has done a good job of addressing pain points for the life insurance industry, not least of which was providing a modern solution for group life. "MajescoMastek should wave the banner with regard to SEG's group life capabilities," Carney says. "There are few [vendor] choices in life insurance generally, and there are even fewer in group life."

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