Accenture (NYSE:ACN) and Apax Partners, a leading global private equity firm, have agreed to form a joint venture to accelerate the innovation of claims, billing and policy administration software for the insurance industry.
As part of the joint venture, funds advised by Apax will acquire a 60 percent stake in Accenture’s Duck Creek Technologies, with Accenture retaining a 40 percent stake. The joint venture will operate as a new and independent company.
The joint venture is intended to further accelerate the development of Duck Creek products and technologies, leveraging advanced digital and cloud technology, and to extend the reach of Duck Creek in key markets. As part of the venture, Accenture will collaborate with Duck Creek to help insurers take advantage of the Internet of Things, Big Data analytics and other emerging technologies. Accenture will also be designated as a premier systems integrator and consulting partner for Duck Creek Technologies pursuant to a strategic alliance arrangement.
Duck Creek Technologies will gain access to substantial capital and management expertise through Apax Partners. This will enable further investment, both organically and through acquisitions, to fuel rapid expansion of Duck Creek products and capabilities – particularly Duck Creek On-Demand, a native Software as a Service capability delivered through the cloud. Combined, this capital, technology and professional services capability will enable new levels of end-to-end, cloud-based solutions for property and casualty (P&C) insurers.
“The insurance sector is on the cusp of a digital revolution that will redefine how it operates,” said John Cusano, senior managing director and head of Accenture’s global insurance practice. “This joint venture will open the door to a brave new stage of development. Apax’s record of investing in technologies that become category-leaders has made them an ideal partner in this venture. We look forward to helping shape and deliver leading-edge digital technologies for our clients through this agreement and maintaining a substantial interest in Duck Creek’s growth and success.”
Duck Creek’s senior management, and approximately 1,000 insurance and insurance software specialists are expected to join the new joint venture. Accenture will own 40 percent of the venture as a significant, but non-controlling minority partner.
Jason Wright, a partner at Apax, said, “Over the past five years, Duck Creek has evolved into a leading global software solution for top insurers. Apax intends to build upon this success by supporting the current management team to accelerate innovation in partnership with Accenture and its significant digital and insurance domain expertise. We believe this joint venture will be a game changer in the insurance technology arena.”
Mike Jackowski, president of Duck Creek Technologies, who will become CEO of the joint venture, said, “There has never been a more important time for insurance companies to embrace new technologies that will secure their future competitiveness. Working with Accenture and Apax, we look forward to continued development and added investments that will deliver true innovation for the insurance industry, now and well into the future.”
Since acquiring Duck Creek Technologies in 2011, Accenture has significantly developed and expanded its suite of P&C insurance technology solutions. The suite supports a full range of capabilities – from underwriting, policy administration and agent support to rating, billing and claims – and is designed to work independently or as a combined suite to manage all aspects of the P&C insurance lifecycle.
Since it became part of Accenture, Duck Creek has expanded its client base to include leading insurers and has been recognized as a “Leader” for its ability to execute and its completeness of vision in Gartner’s Magic Quadrants for Property & Casualty Insurance Claims Management Modules and Policy Management Modules, North America.1
The transaction, which is subject to customary closing conditions, is expected to close toward the end of Accenture’s 2016 fiscal year, which ends Aug. 31. Financial terms of the transaction were not disclosed.