Consolidators' Europe gambits could boost Applied Systems expansion – CEO

UK executive teases wider European entry

Consolidators' Europe gambits could boost Applied Systems expansion – CEO


By Jen Frost

Major UK consolidators have been snapping up businesses in continental Europe while US broking businesses have made moves across the Atlantic, and this acquisition activity spells opportunity for further growth at Applied Systems, Applied Europe CEO Tom Needs has told Insurance Business.

The broker software house, which is now ranked third in the UK according to Needs and Applied Europe CRO Dave Chapman, continues to focus on building out its UK and Ireland presence.

However, with big name brokers having made recent European plays outside of the UK and Ireland, it could be just a matter of time before Applied Europe widens its reach.

“We’re in a great position with consolidators, we’ve got some big consolidators as customers right now and they are continuing to buy into Europe,” said Needs. “I know that there would be an ambition or desire for us to be that chosen platform across all of their geographies.”

UK brokers build out in Europe

Major UK brokers that have sought to build out their business in Europe this year have included PIB, Howden and The Ardonagh Group (Ardonagh).

Continuing on its European acquisition trail, PIB moved for Spanish Fidentia Hispana Correduria De Seguros in February. The broking group has had a presence in Spain since 2021.

In October, Howden snapped up Belgian broker WDR Insurance Group and marked its retail debut in the Luxembourg market with the purchase of United Brokers.

Into November, Ardonagh confirmed its acquisition of Swiss commercial broker ASSEPRO.

European expansion outside of the UK and Ireland may not be a “next year” play for Applied Systems but Needs predicted: “Through consolidators or acquisition, we will probably end up in Europe.”

“We’ve got a service offering that brokers know, like and trust from the territories they currently operate in,” Chapman said. “If we make an acquisition in mainland Europe, then why wouldn’t they start to consider whether they could add value to their businesses?”

US brokers entering UK offer opportunities for Applied Systems

A trend of consolidators crossing over to the UK from across the Atlantic could also serve to provide the software house with a boost, according to the Applied Europe executives.

Applied Systems has more than 160,000 users, many of these within the US, and claims that Applied Epic is the world’s most widely used broker management system.

In June, three NFP UK brokers were onboarded to Applied Epic, meaning the consolidator is now using the platform across the UK, the US and Canada. Headquartered in the US, NFP entered the UK in 2016.

“NFP is the first broker to take Epic global,” said Chapman. “They started out in the US, moved into Canada, and then installed it in the UK and will do that in Ireland in fair time.”

“Significant” Applied Systems US customers are already doing business in the UK and this presents further opportunities for the broker software house, according to Needs.

US and UK broker crossovers and European expansion are trends that the Applied Systems leaders predicted are set to continue.

“Europe is an attractive market, and there’s still good assets in the shape of brokers,” Needs said. “There will be global businesses coming over, including US businesses, and more in Europe buying brokers.

“I can imagine it going the other way as well, as we’re seeing a bit of that too.”

Applied Systems seeks to build out panel and push forwards with commercial insurance focus

At its Applied Net 2023 Las Vegas conference, Applied Systems shone the spotlight on a “digital roundtrip of insurance” and its initiatives to boost growth and profitability for brokers in the commercial lines space.

Recent developments have included a generative AI-driven broker email template and a focus on building out data resources to help brokers better understand their customers’ habits and their own businesses.

“We’re having a big push around commercial lines and really focusing on expanding our panel,” said Needs. “We’ve been very successful in winning new brokers, so we’re getting the distribution now that insurers need to justify coming on to our panel.

“We’re now in this virtuous place with the flywheels really going and we have great momentum with more brokers coming on board, more insurers coming on board, more products, more carriers, and that’s allowing us to win more in the market.”

A “big focus” on more insurers is enabling the software business to pick up more brokers, Needs said, and the rapidly scaling UK business expects to post a profit into 2025.

“It’s the whole chicken and egg debate – for us, the focus is very much about putting more commercial products on the panel and we’ve spent a lot of time and money investing in API technology to make that simpler and easier to achieve,” said Chapman. “We’re working to take the barriers to integration away from insurers, but the big focus for us is definitely winning more share in the market.”

The aim is to capitalise on the business’s “enviable technology stack” while some competitors are still “suffering with dealing with some of their legacy” hampering digital transformation, according to Needs.

As to whether Applied Systems itself is likely to continue on the acquisition train like many larger brokers in the market, Needs said: “We’re always looking for assets that would augment the value we can bring to our customers, so that might be new technology or opening up a new market for us.”

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