Innovation Group: the Eagle has landed!

Tech Market View

John O'Brien, 09:06, 17 June 2015

The Eagle has finally landed. This is the landmark software licence deal we have been expecting The Innovation Group (TIG) to sign, albeit delayed (see here). And it really is a potential game-changer for the insurance software and business process services (BPS) provider.

The deal is with an unamed tier one UK insurer (although we understand it’s CIS General Insurance), for an initial term of 10 years, worth £46m in total to TIG, with £12m being recognised over the next 12 months.

CIS actually issued a separate release, announcing a £55m deal with IBM to build an integrated insurance platform as a managed service for 10 years. IBM will provide new business processing, claims processing, policy servicing, third party interfacing and hosting services. These two deals are connected. 

TIG will be IBM’s software partner in this transformation programme. It covers TIG’s full range of software products including Insurer Policy, Insurer Claims and Insurer Analytics along with a self-service portal.

The complete platform, including the Insurer suite and several of the client’s systems, will be hosted in TIG’s data centres because we were told 'TIG knows the system better than anyone else'. As we pointed out in our new report Business Process Platform Opportunities in Digital Transformation owning the IP gives BPS providers a key differentiator as customers increasingly choose best-of-breed solutions across different partners.  

This is by far the largest single software deal TIG has signed, firmly placing it as a new challenger/competitor to general insurance software/SaaS leaders Guidewire and Accenture Duck Creek, against which it competed for the contract.

CE Andy Roberts rightly believes this is major deal that should spur future large deals. Of course, TIG has to make sure that it doesn’t take its eye off the ball on the smaller bread-and-butter software deals too.