On 19 November 2009, Sword Group announced that it has acquired the full share capital of privately held, Boston-based AgencyPort, which provides Web-based distribution solutions for property and casualty (P&C) insurers. Terms of the deal were not disclosed.

Through this deal, Sword Group has acquired a customer roster in the U.S. and a broader set of solutions to integrate with its growing insurance portfolio.

Its earlier acquisition of U.K.-based Intech in 2005 gave Sword Group intellectual capital for the insurance industry, specifically for the nonadmitted P&C insurance market (excess and surplus lines) for policy administration. Since then, Sword Group has separately offered Sword Intech, a provider of P&C policy administration solutions, and its CRM product Sword Ciboodle. Within the insurance industry, Sword Intech has greater brand recognition and experience in its local market, the U.K. To expand its presence in the U.S., Sword Group needed a distribution channel, which it obtained by acquiring AgencyPort.

AgencyPort has grown its solution and customer list during the past few years and is a strong presence in the U.S. P&C distribution market, offering solutions for Web-based transaction processing between carriers and agents, and a solution for carriers interfacing with agency management systems. AgencyPort staff will augment the Sword staff, providing employees with in-depth U.S. P&C insurance domain knowledge and familiarity with Association for Cooperative Operations Research and Development (ACORD) standards.

Sword Group can now cross-sell its Ciboodle CRM product to all AgencyPort customers, as well as cross-selling Intech to AgencyPort nonadmitted customers and prospects in the U.S. In the short term, Gartner expects Sword Group will continue to focus on U.S. excess and surplus lines, the easiest segment to attract, given its customer base.

Sword Group faces several challenges in successfully exploiting this acquisition:

• Although AgencyPort domain knowledge will help Sword Group with product development, marketing and initially selling into the admitted insurance market, the Intech solution is not proven in that market.
• Sword Group must execute on its plan to expand marketing of AgencyPort in other geographies.
• Sword Group will not announce its development plans for the possible integration of Intech, Ciboodle and AgencyPort until mid-2010, and it will take several person-years to fully integrate the solutions. In the past, the vendors have worked jointly with some customers, but the two solutions lack prebuilt, off-the-shelf integration.
• Sword Group typically operates in a siloed organizational structure, in which each product line issues its own profit-and-loss statement.

P&C insurers:

• Monitor the integration of these companies. Their products could potentially offer a unique combination of CRM, policy administration and distribution solutions that differs from most other vendors' offerings, but integration is critical to simplifying implementation and reducing risks.
• Look for additional funding for enhancements in the AgencyPort platform, making it a better option for insurers that require a Web-based distribution platform.
• If you are already using Sword Intech for excess and surplus lines, and if you plan to replace a policy administration solution, evaluate Intech, but be aware that, to date, the product is not functionally capable of managing admitted business for 50 states.

• "Enterprise Connectivity Required to Improve Insurance IT Operations" — While investments replacing core systems are high among P&C and life insurers, Gartner has seen a growing awareness of the importance of enterprise connectivity and architectural planning among insurers. By Kimberly Harris-Ferrante
• "P&C Insurers Must Continue to Fund Mission-Critical Projects to Grow Their Businesses" — Despite the worldwide economic malaise, P&C insurers continue to build the business case for funding mission-critical projects. By Stephen Forte

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