Open GI sale process could a be defining moment in the history of UK broking technology 

Briefing by Saxon East 

The great game of business chess has begun – and it’s the owners of Applied Systems who have the initiative.

The Applied System private equity owners, Hellman and Friedman, are understood to be interested in acquiring a majority stake in Open GI from current owners Montagu private equity.

For those who don’t know, Open GI is a software house favoured by many brokers – strong in personal lines with a smaller footprint in SME.

Applied Systems is huge in the US and Canada, with a seemingly slick new system called EPIC it is bringing to brokers on these shores.

The Applied challenge 

The problem Applied has is that achieving organic growth in the UK broking software space is exceedingly difficult.

Applied’s EPIC system is seemingly very good and highly-regarded across the pond. In a big UK victory, High Street broker A-Plan bought Applied’s kit.

Yet even when Applied does eventually go live with A-Plan and showcase itself, it is still hard to imagine how persuasive that will be in getting brokers as customers.

That’s nothing to do with Applied, more the inert nature of brokers who are cautious about uprooting or adding to systems with all the cost, complexity and risk. The shadow of the FCA looms large over all they do.

Open GI’s customer boost 

However, the acquisition of Open GI solves that problem. They immediately bring on their books a huge slice of the UK market that would otherwise take years, probably decades, to obtain.

It also gives Hellman a delicious problem in what to do with Open GI and Applied.

Chris guillaume crop

Open GI boss Chris Guillaume - the big picture man and strategic brains behind the software firm

Open GI has invested in its own quality systems – the newly launched Mobius is like a box-to-box footballer that covers every blade of grass.

Mobius can do policy, client management, customer self-service portals, integration ability to hook up with other systems, claims management and perhaps best of all, a leading pricing platform that lets MGAs and brokers with delegated authority take real control in winning customers.

So Hellman could keep two separate brands operating distinctly, or it could try and roll them together into one superpower house outfit.

Hellman is certainly interested in making a play.

The Applied team were reportedly sent out in 2014 to check out on buying SSP, but the deal fell away – probably because SSP does some insurer business, something not in Applied’s core field.

SSP and Acturis implications 

Where does all this leave Acturis and SSP?

For Acturis, they won’t be losing much sleep. It’s number one standing in commercial broking is currently assured.

It’s highly-regarded by brokers and also insurers, where it powers many of the main players’ extranet offerings.

For SSP, which is growing well in the insurer space, it will need to make sure that if the deal does go through, the combined companies don’t taking any market share in the broking sector.

SSP believes the outage issue is being over-played by some and its system are now secure. 

Open gi mobius

Open GI’s Mobius - the next big thing at the Worcester-based firm

And Duck Creek? It’s difficult to spot any real success stories the firm has had in the UK market – but Open GI would be a quality purchase. 

There could well be other parties working in the background keen on a deal. The full picture is yet to emerge. 

The fit is best though for Hellman and Applied, who will need to lock in the Open GI management team.

Sales chief Dave Kelly, managing director Nick Giddings and group boss Chris Guillaume are a good management team, well liked by brokers. Losing them quickly would be a disaster.

It’s all to play for, and what happens next could well be a defining moment in the history of UK broking technology.

Watch this space.