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posted on Jul 13, 2016 by NelsonHall Analyst
Last week, EXL announced its acquisition of LISS Systems (LISS), a London-headquartered provider of policy administration software for the life, annuities and pensions insurance sectors. LISS will be integrated with EXL's insurance business unit. EXL has made employment inducement equity awards vesting over four years to nine new non-executive employees (all of LISS’s management team).
So why is EXL investing in acquiring policy admin software when it already has its own LifePRO platform?
- LISS's proprietary LISSIA platform is used for both traditional and unit-linked life and investment products. LISSIA was first implemented in 2002 at Aviva India. A version for unit-linked Group Pensions went live in Generali Worldwide, Guernsey in 2003, with support for Group Risk added in 2005. LISSIA is being used by clients for the administration of over 1 million policies
- LISS also has a browser-based front end called eLISSIA, extending LISSIA to include supporting functions such as document production, expert underwriting and workflow.
LISS has 11 clients operating in the U.K. and Europe, of which eight are using its eLISSIA platform.
Having made a number of specialist acquisitions in the U.S. in 2014 and 2015, EXL has more recently been investing in growing its business in Europe. LISS will help EXL (which historically did not have much business in LA&P in the U.K.) gain access to organizations such as AIG Life UK, Aviva and Generali and AON Benfield.
But this is not about scale (LISS revenues are <$5m). We believe a key attraction for EXL is the eLISSIA front end, which LISS highlights it developed with multi-channel in mind and which supports rapid new product development. As such, it will enhance EXL's solution offerings for supporting insurers in their digital transformation, and for addressing the millennials market in life insurance.
EXL will continue to offer the LISSIA platform as a standalone offering in Europe, and intends to integrate components of the eLISSIA front-end with its LifePRO platform, and offer this technology to its clients in the U.S. and elsewhere across both L&P and general insurance markets.
There are also potential synergies with RPM Direct, the marketing analytics capabilities company acquired by EXL in 2015.