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Guidewire's Claims Management Solution Adopted by Santam

Zacks Equity Research

Guidewire Software, Inc. GWRE recently announced that South Africa-based insurer Santam will deploy the company’s ClaimCenter offering across personal and commercial business domains.

Futher, Santam intends to implement ClaimCenter solution along its non-commercial motor segment in the first quarter of 2020.

Notably, ClaimCenter is a comprehensive insurance claims lifecycle management solution which encompasses adjudication, operational reporting and loss-report intake processes. The solution is designed to benefit insurers with streamlined claims management processes, enabling them to boost operational efficiencies.

Additionally, Guidewire’s DataHub and InfoCenter solutions have also been adopted by Santam due to their robust business intelligence and data management capabilities.

It is to be noted that Guidewire’s InsurancePlatform solution is already aiding Santam in enhancing its insurance processes. With the synergies of the recently selected offerings and access to Guidewire’s Marketplace, Santam anticipates to provide innovative solutions and minimize total cost of ownership or TCO.

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

Moreover, Guidewire’s ClaimCenter solution is witnessing traction lately. In fact, ClaimCenter solution has been implemented by Japan-based Rakuten General Insurance Co., Ltd. with full-scale deployment due in 2019. With the solution, Rakuten expects to increase accident claims management by 150% for its automobile insurance policyholder customers.

What Investors Should Kow?

Shares of Guidewire have returned approximately 21.1% in the past year, substantially outperforming the industry’s rally of 6.5%.

The outperformance can primarily be attributed to sturdy adoption of several cloud-based products. According to Gartner, the global Software-as-a-Service (SaaS) market is anticipated to increase at a CAGR of 17.8% from $58.8 billion in 2017 to reach $113.1 billion in 2021. The report favors company’s growth prospects and reinforces optimism in the stock.

In fact, the company’s growing clout in the P&C core platform market is evident from market research firm Gartner’s October 2018 “Magic Quadrant for P&C Core Platforms, North America” report where it put Guidewire’s InsuranceSuite offering in the “Leaders” quadrant.

Further, the company’s elaborate partnership programs and strategic collaborations remain a key catalyst. Notably, Guidewire’s Partner Connect Program has been implemented worldwide, benefiting its customers in the property and casualty insurance industry.

Moreover, Guidewire’s cloud deployment partner, Amazon Web Services (AWS) is also gaining momentum, which is a positive.

The company’s acquisition strategy is also a major contributor to growth. The buyouts of Cyence, ISCS (now called InsuranceNow), FirstBest (now called Guidewire Underwriting Management) and EagleEye Analytics (now known as Guidewire Predictive Analytics) are not only aiding revenue growth but also helping the company to expand clientele.

Zacks Rank & Other Stocks to Consider

Guidewire carries a Zacks Rank #2 (Buy).

Some other better-ranked stocks in the same sector include MeetMe, Inc. MEET, Jabil, Inc. JBL and Twilio Inc. TWLO. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for MeetMe, Jabil and Twilio is projected to be 20%, 12%, and 9%, respectively.

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