GUIDEWIRE AGREES TO BUY HYPEREXPONENTIAL FOR $1.7 BILLION

Guidewire said it had agreed to acquire London-based insurance software provider Hyperexponential for a base price of $1.7 billion in cash. The price remains subject to adjustments under the agreement. Guidewire could pay a further $400 million if Hyperexponential meets specified recurring revenue targets, bringing the potential total to $2.1 billion. The deal is expected to close next year.

Guidewire announced the agreement at its Connections conference in Las Vegas on Tuesday. Hyperexponential develops AI-based underwriting and pricing software for commercial property and casualty insurers. The companies already work together through Guidewire’s PartnerConnect Technology Alliance programme. Guidewire says Hyperexponential has supported decisions involving more than $75 billion in annual commercial property and casualty premiums for insurers, reinsurers and managing general agents.

Guidewire says it plans to use Hyperexponential’s software to bring AI agents into work that underwriters and actuaries do when assessing and pricing risks. Guidewire chief executive Mike Rosenbaum said: “We're delighted to welcome Amrit Santhirasenan and the team at hyperexponential to Guidewire.” The company expects the purchase to increase annual recurring revenue and overall revenue growth while remaining within its long-term margin targets. Guidewire says the planned approach would apply to both specialty risks and higher-volume commercial insurance business.