Sapiens
Careers at Sapiens
Mission
Sapiens’ mission is to become a leading provider of innovative software solutions for the global financial services market, with a focus on insurance.
Founding story
In the early 1970s a group of scientists at the Weizmann Institute of Science in Israel developed an object-oriented application generator for use with mainframe computers. They called it DB1, and in 1972 group member Tsvi Misinai took on leadership of the project. He partnered with colleagues Shmuel Timor, Eli Raban, and Shai Sole on its development.
In the late 1970s the Weizmann team aligned with Advanced Automated Applications (AAA) to market DB1 to large domestic organizations. It then began promoting the solution overseas, with one of its first clients being a UK-based infrastructure firm. In 1984 the four men founded their own company to market the product, merging it with AAA and separating from the Weizmann Institute.
The new firm was called Sapiens, and it quickly began expanding its client base globally. By 1990 it had customers in Switzerland, Germany, Canada, and Venezuela. That same year it was registered as a public limited liability company under the name Sapiens International Corporation. In 1992 it completed an initial public offering and began trading on the NASDAQ.
By 1993 Sapiens had 900 employees workng out of 33 offices and a market cap of $340 million. In the second half of the decade it devoted itself to developing legacy modernization products and services and a business rules technology (eMerge). It was successful in garnering clients who wanted to update their systems for the Y2K situation as well as for the new Euro currency.
In 2000 Sapiens raised $15 million in post-IPO equity. In 2001 it was acquired by Formula Systems, and began focusing on providing software for the insurance sector. In 2011 it raised $7.11 million in Series A funding and merged with two subsidiaries of Formula Vision that also focused on insurance. Throughout the 2010s it acquired a number of firms, significantly expanding its capabilities.
Business model of Sapiens
Customer Segments
Sapiens has a niche market business model, with a specialized customer segment. The company targets its offerings at organizations in the insurance and financial services industries.
Value Proposition
Sapiens offers three primary value propositions: accessibility, convenience, and brand/status.
The company creates accessibility by providing a wide variety of options. It has acquired more than six firms since its founding, including StoneRiver, Maximum Processing, Insseco, IBEXI Solutions, and Harcase Software. This strategy has enabled it to greatly expand its capabilities and diversify its portfolio. It now offers solutions in the general insurance, property & casualty, life, pension & annuities, and reinsurance & retirement markets.
The company offers convenience by making life simpler for clients. Its customer engagement platform generates significant information about a client’s individual customers, enabling the client to make more targeted offers. Combined with the Sapiens Portal, the platform also provides multiple touchpoints between client and customer, resulting in more opportunities for active contact and thus more cross- and up-sell opportunities. Lastly, the company’s automated marketing tools set clients up effectively for immediate “push“ and “pull“ customer interactions and saves them time.
The company has established a strong brand due to its success. It is a top provider of software solutions for the insurance industry. It has 2,500 employees operating out of over 21 offices across North America, EMEA, United Kingdom, and Asia-Pacific. It serves over 400 clients worldwide, including Eurolife, RAC Insurance, Aegon, Haverford, Aviva, and Hiscox.
Lastly, it has won a number of honors, including the XCelent Award from Celent for its ALIS Policy Administration System product and the highest scores in three categories in a Gartner report evaluating 15 life insurance vendors.
Channels
Sapiens’ main channel is its direct sales team. The company promotes its offerings through its website, social media pages, webinars, and participation in road shows, forums, and conferences.
Customer Relationships
Sapiens’ customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:
Support Services - These include the following:
- Standard Maintenance Agreement - Included in the basic support package. Covers defect fixing and upgrades of the core product.
- Extended Maintenance – A premium service consisting of a maintenance package customized to a client’s specific needs. Covers maintenance of the customer layer and can include defect fixing, system enhancements, and functional consulting.
- 24×7 Help Desk – Offers 24x7 support for customers in production.
- Onsite Support –Involves experts visiting clients onsite and providing tailored support services such as business analysis of new processes and features, set-up and configuration, knowledge transfer to customer teams, and end-user training.
- Ongoing Configuration and Administration –Enables clients to outsource system configuration and administration to the company’s experts.
Training Services – Specific services include application configuration training, train-the trainer programs, customer layer development training, user acceptance training, IT knowledge transfer training, and deployment training. Formats include public classroom and onsite at client facilities.
Professional Services – Specific services include the following:
- Consulting – Includes performance evaluation monitoring and tuning, KPI/measurement development, business process evaluation and improvement, pre-blueprint evaluation, expert visits, project management office services, go-live readiness services, and change management.
- Project Implementation – Includes system set-up, analysis/design, development/configuration, and internal testing (performed remotely or on-site).
- User Acceptance Testing – Analyzes issues raised by end-users and determines their root causes.
- Migration – Loads and validates migrated data from existing systems into the company’s systems; specific services include migration data extract, migration data load, migration data reconciliation, migration data masking, migration data-to-data comparison, and business and systems migration strategy.
- Hosting – Provides server installation and maintenance from hosting service vendors
- Product Upgrades – Offers analysis, development, testing, and deployment of upgraded projects.
Despite this orientation, there is a self-service component. The company’s website features a “Resources” section that includes the following tools: articles, white papers, analyst reports, case studies, eBooks, brochures, infographics, and webinars.
Key Activities
Sapiens’ business model entails designing and developing its products for customers.
Key Partners
Sapiens maintains the following key partnerships:
- Technology Partners – The company works with technology vendors to ensure its solutions are fully compatible and easily implementable with its clients‘ hardware and software platforms. Specific partners include IBM, HP, and Microsoft.
- Solution Partners – The company works with global and regional partners to offer full consultancy services and solutions. Specific partners include IBEXI Solutions and SAPRUN Group.
- Industry Association Partners – The company collaborates with industry groups and associations to advance the industry. Specific partners include the Association for Cooperative Operations Research and Development (ACORD) and Innovation in Insurance (i3).
Key Resources
Sapiens’ main resources are its human resources, who include the engineers that design and develop its products, the sales employees that promote them, the training/consulting employees that provide instruction/advisory services, and the customer service personnel that provide support. Its consultants have significant insurance and technology domain expertise.
The company maintains important physical resources in the form of five research and development centers. Lastly, it has relied on funding from outside parties, raising $22.1 million as of September 2011.
Cost Structure
Sapiens has a value-driven cost structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is cost of revenues, a variable expense.
Other major drivers are in the areas of sales/marketing, research/development, and administration, all fixed costs.
Revenue Streams
Sapiens has two revenue streams:
- License Revenues – Revenues it generates from fees charged to clients for perpetual and term-based software licenses.
- Service Revenues – Revenues it generates from fees charged for support, maintenance, and professional services such as implementation.
