Guidewire Software, Inc. GWRE recently announced that Amica Mutual Insurance Company will deploy the company’s InsurancePlatform as a Software-as-a-Service (SaaS) offering via Guidewire Cloud to enhance customer experience.

Lincoln, RI-based Amica is the oldest mutual insurer of automobiles in the United States. The company, which has been operational for more than a century, ranks among the top 25 providers of automobile and home insurance products.

Per the agreement, Amica Mutual will leverage Guidewire’ InsurancePlatform via Guidewire Cloud to manage insurance operations including policies and billing. Amica Mutual stands to gain from Guidewire’ InsurancePlatform and have a better knowledge about the insurance industry, following its transfer to Guidewire Cloud.

Notably, InsurancePlatform is a P&C industry platform which is deployed through Guidewire Cloud combining software, services, and partner ecosystem to customer business. The solution aids in risk reduction via increased productivity, bringing speed to market, digital engagement and simplifying IT infrastructure. The solution is designed to benefit insurers with streamlined claims management processes, which in turn enables them to bolster operational efficiencies.

Notably, increasing adoption of technologies like artificial intelligence, robotic process automation, cognitive intelligence or blockchain calls for a best-in-class technology to address customer needs. Guidewire’s InsurancePlatform solution will aid Amica Mutual’s customer-centric business model to improve insurance processes.

With the synergies of the recently selected offerings and access to Guidewire’s Marketplace, Amica Mutual anticipates providing innovative solutions and adapt to changing market demands. 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.

Share Price Movement

Shares of Guidewire have returned approximately 11.6% in the past year, substantially outperforming the industry’s rally of 2.2%.

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

Product Adoption: Key Catalysts

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 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 was recently selected by Optimum General Inc. and Grinnell Mutual. Further, the company announced that South Africa-based insurer Santam will deploy its ClaimCenter offering across personal and commercial business domains.

Moreover, management is extremely optimistic regarding several cloud-based products launched recently, at a time when the P&C insurance industry is moving steadily toward the adoption of cloud solutions.

Zacks Rank and Stocks to Consider

Guidewire carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Match Group, Inc. MTCH, Universal Display Corporation OLED and Autohome Inc. ATHM, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Match Group, Universal Display and Autohome have a long-term earnings growth rate of 15.2%, 30% and 20.9%, respectively.

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