Computing major Computer Sciences Corporation (CSC) has really upped the ante in the insurance space and its latest alliance with BioSignia, which offers North American life insurers and reinsures Mortality Assessment Technology (MAT), testifies the fact.
MAT is a scientific underwriting tool designed to deliver superior results. The tool critically verifies underwriting data and accurately assesses mortality for each insurance applicant. As per the terms of the alliance, CSC will offer MAT as a secure cloud-based service, while BioSignia will continue to own, maintain and enhance the intellectual property. The company has invested $ 55.0 million in the development activity.
Earlier, Computer Sciences won another deal with the Hastings Mutual Insurance Company, where the latter selected the updated version of CSC’s Insurance Industry Data Model – Hastings, Mich. 3.0. The application comprehends data in a logical fashion and accurately represents facts to insurance companies.
The insurance industry is currently facing some fundamental issues that are dampening its ability to achieve top- and bottom-line growth. On the positive side, the insurers also have a number of strategic options along with some support tools that help them to improve their operations and functioning in the insurance market. Herein lies the opportunity for companies like CSC, which can provide insurance companies with much-needed technical efficiency to operate better going forward.
The companies are employing new policies, practices and products in order to improve their operational efficiency and other procedures, thereby improving effectiveness. The insurance industry bellwethers have realized that data is a strategic asset, which is really necessary for the success of Enterprise Resource Management.
Many industry experts also believe that advanced analytics tools, the cloud computing platform and such other technologies can make a big difference to the industry. These are the areas where technologyl companies like CSC can seize the opportunity and drive profitability.
We remain encouraged by Computer Sciences’ new offerings and deal wins, as they are an indication of the efficacy of its products. We believe the company will secure more such deals going forward.
However, delays in the renewal of contracts may slightly constrain revenue growth in fiscal 2011. Moreover, intense competition in the IT and cloud computing space from players such as Accenture plc (ACN) and Hewlett-Packard Company (HPQ) is also a reason for concern.
Currently, Computer Sciences has a Zacks #4 Rank, which implies a short-term Sell recommendation.
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