In Focus: How software houses support acquired brokers to integrate onto new platforms

Mergers and acquisitions (M&A) have been plentiful in the insurance sector, but any acquisitive broker will know the integration phase following the completion of a deal is of the upmost importance.

That is because a smooth transition is required for any deal to be successful and in many cases this means change, with acquired businesses having to shift their data onto new software platforms.

That can be daunting, but is where software houses can provide support. Their role is to help with the transition and help acquisitive brokers move purchased companies and customers onto their existing platforms.

Dave Chapman, chief revenue officer at Applied Systems, said the software house does “a lot of hand holding” when transitioning new companies onto its own platforms.

“We do a lot of hand holding with the current staff [of an acquired broker] around utilisation of the new system because they’re coming from something other than an Applied platform,” he said.

“Nobody particularly likes change, so therefore [we] work with them through the organisation and make sure it’s not as daunting as perhaps sometimes it can feel.”

And as part of a software house’s duty, Chapman said Applied provides advice and assistance for a transition away from an Applied platform as well.

“So, what we try to do there is make sure that data is provided in a timely manner and that we are always trying to give the best level advice to help that broker transition,” he added.

Fear of change?

With change being a daunting prospect, it’s inevitable that this will bring fear around moving data onto a new platform.

Matt Pawley, UK and Ireland managing director of insurance broker NFP, said an integration would involve understanding where an acquired business “fits in the whole operational model”.

“[This includes] where their specialty capabilities are, being fully rebranded, being fully on board with all the systems and basically being an NFP business,” he said.

NFP have announced several acquisitions so far in 2023, including West Midlands-based Gravity Risk Services.

The deal will see NFP integrate Gravity’s risk services into its existing commercial insurance offerings, employee benefits and human resources (HR) services.

Pawley said the one thing acquired businesses could be worried about is how to carry out their job when their data is on a new platform.

“One of the biggest things we found with moving people over is how that new platform impacts their processes,” he said.

“It’s less around the data transition and more around the impact of that.

“[They could think] if it’s wrong, can I renew? If the processes are going on a different one to mine, can we adapt? And can the whole process be done so neat that it’s seamless and it doesn’t impact my revenue?”

Chapman said one they key ways Applied Systems attempts to reduce fear is by providing consultancy, expertise and as “many touch points as you can throughout the process”.

“That starts building a rapport with those individuals, you actually take them on the journey,” he added.

“It sounds a bit cliched, but actually you’re leading them through it.

“So, working very closely with the acquired businesses is something that actually makes the whole experience far more enjoyable for everybody.”

Broker role

While software houses play a crucial role in the transition of data onto a new platform during the acquisition process, chief executive of JMG Group Nick Houghton said acquirers should have more of the responsibility to execute the integration.

The group has made several acquisitions in 2023, including Knightsure Insurance Brokers and T I Alexander Insurance Brokers in two sperate transactions in January, while it also snapped up HGV and motor trade insurance broker New Era in March.

“I see it as it’s our responsibility as a responsible acquirer to have the expertise and the resource in-house to project manage and then ultimately execute the transition over on to our own back office system,” he said.

“The responsibility rests with the business doing the acquiring and making the transition.

“It’s our responsibility to get it right.”

Ben Legg, chief product officer at software house Open GI, said that technology within an acquisition played “only a very small part of the M&A process” and its role was to “be flexible and open enough to allow [acquiring firms] to do it the way they want”.

He explained: “Where the technology element comes in, we absolutely have a very important role in supporting customers doing that. We personally have teams that will support our customers to do that.

”But in terms of the overarching M&A process, that’s only one of many steps.”

Reduce friction

As part of the process to support customers during a transition process, Legg said Open GI aims to “reduce the friction to enable people to connect things to our platform”.

He said the company does this by removing the walls surrounding the legacy house software model.

He added: “If you’re consolidator with existing system in place, plug them in to us, we encourage you to do that.

“We’re not going to make it hard, we’re going to make it as easy as possible because we recognise that’s more powerful than having to sit there waiting for us to do it.”

Chapman added that Applied Systems builds its technology to be “open and flexible”.

“What that really means is accessibility to data,” he added.

“So the ability to get to that data in a real time basis, which means that we’re continually getting access to the very up to date, up to minute set of data that exists within an application.”

“This means that for businesses that are being acquired by an Applied broker, they can very quickly start to measure and monitor performance.

“For a business that’s acquired who sits on Applied, it’s easier to get to their data and share that with the new third party.”