“[Insurers] are certainly looking closer at their underwriting systems because their margins are being squeezed tight. They are looking for ways to increase those margins because they don't anticipate any rate relief coming soon.

There are multiple reasons why we're stuck in this soft market. The most obvious reason is there is too much capacity in the industry. There are too many players and competition is driving prices.

What's motivating [spending for underwriting systems] is a preparation for the hardening of the market. With the consolidation that's going on in the industry there are a lot of legacy systems—multiple systems—that make up a carrier's underwriting platform, so this is an attempt to consolidate and streamline these different systems [insurers] have taken on in mergers and acquisitions. We see that as the main driver of the investment going on in the underwriting space.

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