Here we go again; within the blink of an eye FIS acquired SunGard. The joining of two more global technology firms creates another global technology services giant in the financial services space.
Why so many?
- Power of scale. The power of size allows companies to consolidate overhead with the merger of people, processes, infrastructure and product offerings, allowing true scale for profitable growth.
- Market dominance. Buying market share and client footprint across industries certainly is faster than organic growth, and it allows for performance balancing across industries as the market swings and shifts.
- Diversification of offerings and clients. The broadening of offerings, rather than deepening capabilities, allows for an expanded footprint in customers across many industries.
What does this mean to us in insurance?
- Fills the gap. Conjoinment creates opportunities to bring together a suite of offerings that better align to the changing needs of insurers as they continue to transform and innovate toward becoming the Next-Gen insurer.
- Reflects financial strength. Many M&As reflect the health and wealth of the financial services industry, especially in insurance. Insurance is a top target industry for many solution providers due to growing technology investments, expanding needs and demand, and solutions providing more offerings.
- Presents fewer options. As we see more solution providers consolidate, there are fewer company options. But on the flip side, the solution providers will bring together how these technologies and services all fit together.
So don’t blink, there will be more to come as we see more consolidation all with the goal to strengthen offerings, broaden footprints, position for growth, and ultimately seize the pot of gold in insurance.
This blog entry has been republished with permission.
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