New Delhi: Tech Mahindra is eyeing big opportunities in the insurance industry globally. And the company is gearing up to tap these opportunities by strengthening its technology capabilities not just organically but also inorganically through acquisition and strategic investments.
Tech Mahindra on Monday said it has acquired a 100% stake in a European firm Com Tec Co Ltd (CTC) for €310 million, including earnouts and synergy linked payouts.
Headquartered at Egkomi, Nicosia district of Cyprus, CTC has around 50 employees with development centres in Latvia and Belarus. The firm mainly provides IT solutions and services to the insurance and financial services industries.
With CTC buyout Tech Mahindra is aiming to offer high-end digital engineering services to insurance, reinsurance and financial services organisations globally and scale its nearshore delivery presence.
Further, the Indian IT services company is also investing a cumulative amount of €20 million in two insurtech ventures SWFT and Surance. Tech Mahindra will have a 25% ownership in each of these two entities by the same founding group as CTC.
SWFT is a SaaS-based digital customer engagement platform that offers multiple functionalities for insurance sales and distribution. It is designed for digital brokers, price comparison websites, and insurers wanting to directly reach their customers through digital channels.
Surance is an end-to-end personal cyber insurance solution that focuses on vulnerability assessment, cyber protection, and cyber insurance coverage.
According to Vivek Agarwal, President – BFSI, HLS, and Corporate Development, Tech Mahindra, the insurance industry is currently undergoing a significant transformation which is driven by new emerging business models, that are powered by disruptive digital technologies.
“In order to enable this digital transformation, we are investing in strengthening our capabilities to support insurers in accelerating their transition to cloud-based platforms and provide end-to-end engineering with a strong European nearshore presence,” said Agarwal.
“We welcome the CTC team into the Tech Mahindra family, and we expect to achieve significant market and service line synergies through this combination,” added Agarwal.
Through these investments, Tech Mahindra is building differentiated capabilities for digital transformation in insurance, reinsurance, and financial services.
CTC’s expertise and experience in delivering marquee solutions for customers will complement Tech Mahindra’s offering to provide end-to-end digital engineering, Artificial Intelligence, Machine Learning and DevSecOps capabilities.
The acquisition will also help Tech Mahindra to scale its European presence with over 700 highly skilled IT professionals in contemporary technologies and processes.
“Becoming a part of a global entity like Tech Mahindra will give us immediate access to global scale and create a tremendous growth and development opportunity for our people and the business,” said Avraham Shaked, Co-Founder, Com Tec Co IT Ltd.
The acquisition will help Tech Mahindra in strengthening and expanding its NXT.NOW framework and focus on digital growth through next-generation technologies and digital transformation for customers.