While the software market in insurance remains strong despite the economy, the number of mergers and acquisitions has slowed. George Grieve, founder and CEO of CastleBay Consulting, explains the impact of this on vendors and insurers.

TD: Merger-and-acquisition activity among insurance software vendors was at an all-time high for the first nine months of 2009. Where does it stand today, nine months after our economic world got turned upside down?

GG: All indications are M&A activities have decreased significantly since the end of [last] year. Obviously, that has a lot to do with what has happened economically in the last six to nine months, but it's also part of what you generally see in M&A in our marketplace, which is you tend to get cycles and flurries. We had a flurry in late 2007 through the first half of 2008, which I think was driven by the general buoyancy of our market in terms of carrier companies buying replacement solutions for core administration systems. I believe that attracted some larger players into the market in M&A mode. I think there was a natural cycle anyway, but that cycle was abruptly ended by the crash in the economy last year.

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