Wipro brings Duck Creek to mid-tier P&C insurers with Aggne investment

Despite the insurance market’s innovation potential, challenges like inflation and rising interest rates have traditionally hindered insurers’ transformation efforts. This is particularly true for Property & Casualty (P&C) carriers, as the rising cost of claims impacts their bottom line, leaving limited investment capital for transformation initiatives. In response, savvy service providers are finding fresh approaches to drive value for insurers.

In February 2024, Wipro announced a significant investment into Duck Creek powerhouse Aggne, a move believed to help P&C carriers achieve new value by breaking down barriers to deliver faster time-to-value with reduced implementation costs. While Aggne traditionally caters to mid-market insurers, the capabilities and scale of Wipro will allow them to maintain that focus while expanding Aggne’s attractive model to tier one and two carriers.

Wipro’s Aggne investment brings a differentiated Duck Creek approach and a 230-strong-person team

Since its inception in 2019, Aggne has focused heavily on nurturing deep Duck Creek capabilities—demonstrated by its ‘Premier Partner’ status in the partnership ecosystem, a notch higher than Wipro. Unlike many peers that focus on delivering Duck Creek implementations for leading tier one and two insurers, Aggne differentiates itself by targeting mid-market insurers, where adoption is typically lower due to slim innovation budgets and appetites. HFS believes this is why Aggne is one of Duck Creek’s preferred partners, as its differentiated approach creates a significant growth lever for the platform provider.

To cater successfully to the mid-market, Aggne shifts the needle from the typical people approach adopted by many peers, which involves a 100-person team building solutions from the ground up. Instead, Aggne has created its own catalogue of reusable tools, accelerators, and templatized implementations to focus on quickly delivering what matters: value. Aggne advises that they are up and running for the typical client within 100 days with minimal implementation costs. Any deviations and customizations are then tackled by a small Aggne team. This approach aligns well with HFS own take on Technology Arbitrage and our truncated S-curve of value.

Wipro’s investment sees the provider become the leading shareholder, with a long-term plan to formalize an acquisition within the next four years. However, when HFS analysts connected with leadership from Wipro and Aggne, we learned that the decision was made not to integrate Aggne into Wipro’s wider insurance practice to protect its existing success. They explained, “Aggne has something good going on.” Aggne will maintain its 230-employee team but will be supercharged by Wipro’s scale and financial injection.

Wipro promises to arm Aggne with a notable scale engine and a book of contacts to complement its existing capabilities

Wipro’s existing insurance business naturally leans towards Life and Annuities (L&A), so the Aggne investment enhances its foothold in the P&C sector, which HFS estimates contributes around 40% of the wider insurance practice. The synergy is clear: while Aggne is a ‘Premier’ Duck Creek partner, Wipro is only a ‘Select’ partner, meaning it has a growing practice that will benefit from Aggne’s capability. Executives from both firms confirmed they will present one unified organization to Duck Creek moving forward.

Moving forward, executives from Aggne and Wipro hope their joint offering will enable the delivery of Aggne’s differentiated Duck Creek capabilities at a much larger scale. This means increased service levels for Aggne’s existing clients, but it’s Wipro’s clients where we expect to see the most impact. Injecting newfound scale could see Aggne take its Duck Creek capabilities upmarket to leading P&C insurers, allowing them to benefit from reduced implementation costs and faster time to market. To help make the journey smoother, Wipro offers a book of leading P&C carriers presenting cross-sell opportunities, and executives advise it’s going successfully thus far.

The Bottom Line: Wipro could take Aggne’s unique approach upmarket to unlock new value for leading insurers

Wipro’s scale, combined with Aggne’s differentiated approach, has the potential to drive reduced implementation costs and faster time-to-value for tier-one P&C insurers—an interesting prospect at a time when there is a razor focus on innovation budgets. However, working with tier-one insurers brings with it a realm of challenges to navigate, including decades of legacy technology and piecemeal transformation efforts. Whether Aggne’s approach will translate to tier-one and tier-two insurers is yet to be seen. Finally, it’s important to note that Wipro opting to structure this deal to become a majority shareholder, rather than an outright acquisition, gives the provider an easier exit should the two parties struggle to integrate effectively.