LexisNexis Sells Insurance Software Business

San Francisco-based private equity firm Genstar Capital added to its portfolio of software firms focused on the insurance vertical as it acquired the Insurance Software Solutions business unit from LexisNexis Risk Solutions.

Financial terms of the transaction, expected to close by the end of 2011 pending customary conditions and regulatory consents, were not disclosed.

Based in Hartford, Conn. the business unit has approximately 400 employees and provides policy administration software to more than 100 property/casualty insurers. According to the companies, Jeffrey Glazer, CEO, Insurance will be leaving LexisNexis to lead the Insurance Software Solutions business, which Genstar expects will be renamed Insurity.

"We are excited to be partnering with Jeffrey and his experienced management team to leverage Insurity's industry leading software and service assets to drive growth both organically and through acquisitions,” said J. Ryan Clark, managing director of Genstar. “The combination of our capital resources and operating expertise and management's strong capabilities and experience will position the Insurity team to accelerate its growth and profitability.”

LexisNexis Risk Solutions CEO James Peck says jettisoning the unit will help the firm focus on its core competencies. “The data and analytics business is the focus of our Insurance portfolio as we continue to help our customers make faster, more accurate underwriting and policy-pricing decisions, reduce claims losses and improve their client’s experience,” Peck said in a statement.

Celent Senior Analyst Donald Light says the new backing from Genstar coupled with the company’s industry-specific vision should enable it to compete is a highly competitive marketplace. “The intent of Insurity is to continue leveraging data sets from LexisNexis and to access broader data sets as well,” Light told Insurance Networking News. “They are not walking away from analytics. They have a lot of market challenges like all insurance software companies do, but they will be able to have a much more pure focus on meeting insurance challenges.”

He added that the deal also continues a trend of private equity firms eyeing technology providers that focus on the insurance vertical. “Insurance is a very small niche for private equity firms, but it’s one that they think can have some upside.”

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Analytics Data and information management
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