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InsurTech Newsletter: sum.cumo and Sapiens

In the current edition of InsurTech Newsletter, chief editor Dr. Errit Schlossberger contemplates the new collaboration between sum.cumo and Sapiens. The article examines sum.cumo's cooperation with its new associate Sapiens, the advantages that cooperation brings to both, and each partner's area of expertise.

While in the USA, Sapiens may already be playing in the same league as well-known giants of the industry, in the German market, it is still largely unknown. Based in the Israeli metropolis of Tel Aviv, this Nasdaq-listed high-growth company is finally making its long-anticipated entry into the German-speaking market as a partner of sum.cumo.

According to Errit, cooperating with sum.cumo may prove to be its lucky break. With regard to their customer and demand segments, the two companies complement each other very well. "While Sapiens replaces legacy systems and specializes in data migration, sum.cumo concentrates on greenfield and digital custom solutions," writes Schlossberger in the current newsletter. 

The newly inaugurated cooperation will profit from the lack of overlap in the two companies' products and from the opportunity to combine the large portfolio of core systems designed by Sapiens with the front-end solutions of sum.cumo. Read on to find out more about what the two-brand strategy of these new partners might look like – and why their common cause promises to be a successful one.

sum.cumo and Sapiens are joining forces

Founded in 2010, the insurtech company sum.cumo has increased its turnover five-fold in the last three years and has been named one of the most interesting German insurance startups in many reports (including Intelligent Insurer's list, "InsurTech: Hot 100"). Digital projects such as nexible, Dextra and (most recently) freeyou count among the highlights of its record. So it's no great surprise that many investors have just been waiting for the Bayerische group to split off its IT division. What was somewhat surprising was Sapiens, a company from the tech mecca Tel Aviv, jumping into the fray: paying EUR 28.4 million for sum.cumo (EUR 24.4 million in cash and EUR 4 million in Sapiens stock). 

While Sapiens is not well known in Germany, in the USA, the company plays on a level with industry heavy-hitters such as Guidewire and Duck Creek. So it was really just a matter of time before the Nasdaq-listed high-growth company turned its sights on the German-speaking market.

Its decision to throw in with sum.cumo appears a clever move, with practically no overlap between the two companies' products and sum.cumo having chosen a completely different course with regard to its inventory system and especially its digital solutions. At the same time, the core systems of Sapiens – designed for large inventories – can certainly be combined well with the front-end solutions of sum.cumo in order to provide capabilities that are ever more in demand with today's insurers.

With regard to their customer and demand segments, too, the two companies complement each other very well. While Sapiens replaces legacy systems and specializes in data migration, sum.cumo concentrates on greenfield and digital custom solutions. 

Thus it makes sense that they're opted for a two-brand strategy. sum.cumo will continue working with its business model – which has been successful thus far – and incidentally build up structures that will help Sapiens break into the German-speaking market. According to reports, Sapiens has already won its first customers with its IDIT Suite, a blockbuster product for the property insurance segment.

Continuity is assured in personnel, too, with co-CEOs Björn Freter and Ingolf Putzbach both staying on with sum.cumo while helping set up the Sapiens project.

So hats off to the management of Bayerische, whose keen intuition to join up with sum.cumo in 2016 has really paid off. The profits accruing are supplemented by the fact that they've gotten a digital platform of their own practically for nothing – and there's likely room for more investments in the near future.