A new set of reports from Celent analyzing software deal data from the last two years finds that distribution software sales spiked last year among P&C insurers, and that while insurance software sales overall remain sluggish, 2011 broke a three-year streak of decreasing overall sales.
Celent states that the 6-percent uptick in purchases among all insurers last year reflects the marginal growth of the economy at-large, and that the increase was driven by life/annuity purchases.
Among the P&C deals tallied for the report, the largest percentage were for infrastructure and financial solutions, core processing solutions were second in volume, representing 27 percent of the total deals, which is slightly less than the 33 percent of the whole that core processing represented in Celent’s last software deal trend report.
The largest increase was in distribution, which rose to 27 percent from 10 percent in the last report. Document/content management saw a 9-percent decrease from the last reporting period, representing only 15 percent of the deal volume. In three years, this category has decreased 21 percent.
The report, titled “North American Insurance Software Deal Trends 2013,” analyzes a total of 1,475 software deals that took place between Jan. 1, 2011 and Dec. 31, 2012. Approximately 64 percent of the deals were with property/casualty insurers, and 36 percent were with life/health/annuity insurers.
SaaS delivery has risen from 10 to 14 percent of all reported deals in last year’s report to 27 percent this year — contributing to this is the fact that SaaS is used heavily in distribution deals, which are also becoming increasingly popular.
In terms of size, Celent noted that insurers of all sizes are purchasing packaged software, and that Tier 1 and 2 insurers increased their buy volume in 2012. It also appears that insurers are more willing to develop more relationships with new vendors, as the report reads, “Not since 2008 have new deals accounted for greater than one-third of the deals. Insurers still tend to expand relationships with vendors with whom they already have relationships, but new relationships are now being built as well.”
