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Guidewire (GWRE) Offerings Much in Demand Among Insurers

Zacks Equity Research

Guidewire Software GWRE announced that the company’s InsurancePlatform suite of products have recently been implemented by Edina, MN-based Western National Insurance. Moreover, France-based Groupe BPCE’s insurance arm, Natixis Assurances, opted for Core and Digital products of InsurancePlatform to accelerate claims management processes.

Notably, InsurancePlatform aimed at property and casualty (P&C) insurance industry, can be deployed through Guidewire Cloud or an on-premise setup. The suite of solutions comprising Guidewire InsuranceNow and Guidewire InsuranceSuite enable risk reduction by facilitating higher productivity, accelerating speed to market, digital engagement and simplifying IT infrastructure.

InsurancePlatform aids insurers to streamline claims management processes, which in turn enables them to bolster operational efficiencies.

We believe that rapid adoption of Guidewire’s solutions will aid the company in bolstering subscription revenues, consequently enabling it to expand total addressable market or TAM.


Moreover, an expanding customer base is instilling confidence in the stock. Notably, shares of Guidewire have returned 26.8% in the past year, outperforming the industry’s rally of 18.1%.

Factors Favoring Adoption of InsurancePlatform

Guidewire’s cloud-based subscription products are witnessing growing adoption as insurers are increasingly looking to digitally transform their business processes.

Moreover, the company has increased investments to enhance insurance software products via collaborations with leading on-demand cloud infrastructure vendors including Amazon Web Services and Microsoft Azure.

In fact, per Gartner, the global Software-as-a-Service (SaaS) market is expected to hit $143.7 billion by 2022 compared with $80 billion valuation in 2018. This reinforces company’s growth prospects in the domain.

Further, expanding Guidewire PartnerConnect program is enabling the company to strategically expand business.

Guidewire’s acquisition strategies aimed at strengthening InsurancePlatform, remain a key catalyst. The acquisition of ISCS (now called Insurance Now), FirstBest (now called Guidewire Underwriting Management) and EagleEye Analytics (now known as Guidewire Predictive Analytics) are not only bolstering revenue growth but also aiding it to expand clientele.

Notably, the cross-selling of the product suites has increased customer base and revenue generation. Moreover, acquisition of Cyence, which enables determination of economic impact of a cybercrime via a software platform, is expected to enable Guidewire secure transaction management processes.

Wrapping Up

Guidewire’s initiatives to enhance offerings via product enhancements, inorganic strategies and collaborations and partnership programs are enabling it to expand clientele. This bodes well for top-line growth.

However, increasing investments are likely to weigh on the bottom line, at least in the near term. Moreover, buyouts pose integration risks, which remain a concern.

Zacks Rank & Key Picks

Currently, Guidewire carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader sector are HubSpot HUBS, Alteryx AYX and Rosetta Stone RST, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for HubSpot, Alteryx and Rosetta Stone is pegged at 47.8%, 13.7% and 12.5%, respectively.

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