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Steel Card Expands ChoicePoint's Insurance Software Range

California-based vendor adds P&C personal lines software to ChoicePoint's Insurity subsidiary's commercial software capabilities.

Maria Woehr, Associate Editor of I&T speaks with Jeffrey Glazer, president of ChoicePoint's Insurance Division about the vendor's strategy to dominate the P&C industry software space and how Steel Card's acquisition will open up the vendor's product offerings to personal lines.

The latest step in ChoicePoint's run to become a dominant P&C industry software provider came last week when the vendor announced it would acquire Steel Card (Santa Barbara, Calif.). The Steel Card acquisition will allow ChoicePoint (Alpharetta, Ga.) to add personal lines software into its insurance software flagship brand Insurity's (Hartford) capabilities. Steel Card's Web-based personal lines software product for property and casualty insurers, Apogee, will be integrated into Insurity's Insurance Decisions, which until now was commercial lines focused.

"We have more customers that come to us saying they prefer to work with one vendor that provides an end-to-end suite. The Insurity segment originally provided commercial software, and customers were looking for personal lines software as well as commercial," says Jeffrey Glazer, president of ChoicePoint's insurance division. "The Steel Card component has given us the capability to offer personal policy lines processing."

Details of the acquisition were not released, but employees of Steel Card will become ChoicePoint employees. "We want these people to stay as a part of our company and to surround these entrepreneurs [such as Max Drucker, who co-founded Steel Card] with some of the processes and services that ChoicePoint has ... and to help us create stronger offerings," says Glazer.

Through the acquisition ChoicePoint will also gain Steel Card's insurance clients: California State Automobile Association (CSAA; San Francisco; $2.5 billion in total assets), Western United (Irvine, Calif.; 250,000 policies in force), MeraStar (Chattanooga, Tenn. (about $58 million in written premium), and GMAC Insurance (St. Louis; an assets base of over $ 100 billion.). Steel Card's clients declined to comment on the acquisition.

In the past month, the Alpharetta, Ga.-based vendor has announced the acquisitions of three other insurance software vendors including ePolicy (Torrance, Calif.), Elios (San Ramon, Calif.), Insuratec (Sacramento, Calif.). The acquisitions all added range and flexibility to ChoicePoint's commercial line portfolio. Through these acquisitions, ChoicePoint projects a 12 to 13 percent projected sales growth in its insurance business.

"We are aggressively building new products, and we are aggressively looking for other acquisition opportunities," says Glazer.

With the technology from the newly acquired companies and its partnership with Microsoft, ChoicePoint is developing an XML-based commercial underwriting product. The service allows carriers to submit commercial risk queries through a UNIX-based platform, compare the information in its database and provide accurate insurance scores for carriers through analytics based on the name of a commercial risk. "The insurance carrier will just send us the name of a commercial risk and we will be able to provide an accurate insurance score," says Glazer.

ChoicePoint's strategy is not unlike many other software players in the insurance market, according to Matt Josefowicz, manager of the insurance practice at Celent (Boston). "They are pursuing a similar strategy to CSC [El Segundo, Calif.] or Fiserv [Brookfield, Wis.], to build a broad portfolio of offerings to help make their applications more attractive for carriers to purchase without taking the organizational risk," says Josefowicz. The insurance software market the insurance industry will go through, "a massive consolidation," in the upcoming months, according to Josefowicz.

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