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SAP Move Strengthens Insurance Industry Profile

Ara Trembly
Insurance Experts' Forum, April 22, 2010

SAP AG, a company that has been seeking to make inroads into the insurance technology space for years, has announced its intent to acquire TechniData AG, a provider of product safety and environmental, health and safety (EHS) solutions.

At first glance, the announcement appears to have little relevance to the insurance industry. TechniData, based in Markdorf, Germany, 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, however, is “comply.”

“SAP and TechniData have enjoyed a very productive, long-term relationship, and we are truly excited about joining the SAP family,” said Juergen Schwab, CEO, TechniData AG. “We believe that the scale of SAP’s development and field resources combined with our expertise in the EHS and product safety domains can help us bring the value of sustainability to more customers worldwide.”

Environmental, health and safety compliance are, of course, critical factors in determining insurance risk, and what could be of more value than having insurance systems that can tap into such compliance expertise? According to SAP, its strategy “focuses on adding value to customers’ investments in SAP.” For insurers and others who want to know as much as possible about the compliance of insureds, this is a valuable addition, indeed.

The SAP EHS Management application already is designed to help companies address regulatory compliance in the areas of product, plant and people safety. According to SAP, it helps to reduce both EHS risks and compliance cost at the same time. Adding the TechniData capabilities and expertise may well give SAP the right to now call itself the compliance guru. And if the combined resources can provide this level of compliance management for EHS, perhaps it can do the same for other areas of regulatory compliance.

In any case, this is a good move for SAP in terms of its visibility in the insurance space. I’m looking for much more out of this company as the acquisition mechanism rolls on.

SAP anticipates that the acquisition will be completed in the beginning of the third quarter of 2010. Terms and purchase price were not publicly disclosed.

Ara C. Trembly (www.aratremblytechnology.com) 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 ara@aratremblytechnology.com.

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 www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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