September 10, 2018 by Greg Meckbach
Guidewire Software Inc. is “not interested” in building a services organization and is touting its new analytics and data services group to insurance buyers.
The new analytics and data services group – formed after the acquisition in 2017 of modelling provider Cyence Inc. – could potentially offer new products that do not necessarily require customers to run Guidewire Insurance Suite, CEO Marcus Ryu said during a recent conference call.
Guidewire makes the policy administration software that many Canadian P&C carriers are moving to in order to update their computer systems. Insurance Suite can be customized to suit what a customer wants and is made primarily from Guidewire’s core products that handle claims, underwriting and billing software.
“There is a constituency of executives in the [property and casualty insurance] industry that doesn’t think about [information technology] a lot,” Ryu said Sept. 5 during a conference call discussing Guidewire’s financial results for the year ending July 31.
The insurance technology buyer “that we’ve become very well known to and very practiced to talking to … is very IT-focused,” Ryu said. “There are certainly business principles that are important in the claims operation or the underwriting operation, but it has a heavy IT element.”
But in the P&C industry, executives have more of an actuarial or risk modelling background, Ryu suggested. Guidewire will tend to approach non-technical buyers with a “data and market first kind of message as opposed to a systems and applications kind,” Ryu said.
Insurance companies are in “various stages of replacing their legacy systems,” Scott Heaman, president of Kitchener, Ont. brokerage Advocate Insurance, told Canadian Underwriter earlier. At the time, most insurers with whom Advocate placed policies were upgrading to Guidewire, though some are using Duck Creek products instead, Heaman said at the time.
Economical Insurance is one Guidewire user. In 2017, Guidewire announced it sold PolicyCenter and BillingCenter to Economical Insurance, with Deloitte doing the systems integration.
Ryu suggested this past Wednesday that Guidewire will rely even more on systems integrators (SIs) in the future because it offers insurers the option to buy software using the “cloud computing” model, meaning the software is installed on someone else’s computer.
“The cloud does not make [software implementation] magically simpler,” Ryu said. “There is a ton of work involved every time” a customer implements a Guidewire product in the cloud, Ryu added during the call in response to a question from an investment analyst.
Guidewire SI partners include Capgemini, PwC and Deloitte.
“One of the things we are doing literally this week is education outreach to all our core [systems integrator] partners to make sure there is clarity on how essential they are to the journey we are on,” Ryu said. “We don’t have the services organization nor are we interested in building the services organization it would take to meet the demand” for the integration work needed to implement insurance software in the cloud.
“We will rely even more heavily on our SI partners going forward to make that happen,” Ryu said.