Return of the Guru

Acquisition Helps Position IBM for Further Growth in Insurance

Ara Trembly
Insurance Experts' Forum, September 16, 2010

Back in April of this year, I wrote about an announced under-the-radar acquisition by SAPTechniData AG, a provider of product safety and environmental, health and safety (EHS) solutions.  While the insurance community probably paid scant attention to the news, TechniData provides systems integration, managed EHS (environmental, health and safety) services, regulatory content and software to help companies comply with regulatory challenges in these areas.  The magic word here for insurers was “comply.”

Now, IBM has announced a definitive agreement to acquire OpenPages, a privately-held company based in Waltham, MA. OpenPages provides software that helps companies more easily identify and manage risk and compliance activities across the enterprise through a single management system. Financial terms were not disclosed.

Why are acquisitions like these so important?  As IBM points out in its announcement, “with growing volumes of data, disconnected systems, constantly changing regulatory compliance challenges and a dynamic business climate, gaining a complete view of an organization's risk exposure is increasing in complexity.”

The announcement added that an IBM study of 1900 global CFOs and senior finance leaders revealed that risk management has risen in priority by 93% since 2005. The survey also noted that two out of three companies had encountered material risk events within the past three years. 

So why am I focusing on these events?  I believe they illustrate a growing trend among our major industry vendors.  Software and platform providers are no longer content to compete on their products alone.  Instead, these vendors are working hard to stay ahead of trends in the insurance industry and to then provide thought leadership that expresses itself not only in further product development, but also in extending the company’s capabilities to the areas that are most meaningful for future growth.

Indeed, as the IBM announcement points out, “managing risk is a top priority for businesses in all industries including finance, insurance, retail, healthcare and energy and utilities.”  Of course, risk management has always been important to insurers, but in the current economic malaise and tight market conditions, the role and importance of managing risk have been magnified to a level we could not have foreseen before 2008.

This kind of aggressive looking-ahead and planning is, of course, a risk in itself.  Yet given current conditions, it seems like a well-thought-out gamble.  For my money, it is the aggressive vendors and insurers who stand the best chance of profiting from current troubles.  Even if huge short-term gains are not realized, those who take risks based on solid trends like the need for better risk management will, in my opinion, emerge head and shoulders above those who do relatively little as they wait out the economic storm. 

The acquisition is subject to applicable regulatory clearances and other customary closing conditions. Following the close of the acquisition, IBM says intends to integrate OpenPages within IBM's Business Analytics software portfolio.

Meanwhile, the move strengthens IBM’s already-considerable foothold in our industry.  It should be interesting to see how this all plays out. 

Ara C. Trembly ( is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News. 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Insurance: The Next Generation (Part 2)

The Internet of things and the burgeoning number of smart devices coupled with cognitive computing will offer a more evidence-based, real-time approach to managing risks.

Social Media Turns the Sales Funnel Upside Down

If you can reach one member of a group with content that meets the criteria for contagious content, then they are likely to share with others.

Insurance: The Next Generation (Part 1)

Insurers are at a moment when their technological capabilities can be used to improve many of the legacy issues plaguing the industry.

Predicting the Future Becomes Reality

A recent Big Data experiment showed 70 percent accuracy in predicting crime in certain locales. The implications go far beyond that.

Social Media for Insurers — Stop Counting and Start Measuring

Measuring goes beyond just accumulating fans and followers: it looks at the contribution to business.

Keys to Successful Policy Administration System Upgrades

Celent surveyed 44 North American insurers to find answers to the major challenges of upgrading policy admin systems.