Alexander Forbes said the agreement would enhance the delivery for its clients and provide solutions.
However, the firm refused to disclose the value of the contract.
Chief executive Andrew Darfoor said Alexander Forbes were looking for a strategic partner that could provide them with modern technology and a digital platform in order to deliver innovative and best-in-class solutions to their client base.
“The transaction with Sapiens is the largest single investment in technology and digital in the history of the group.
“This is a critical component of our strategic ambition of becoming the leading pan-African financial services leader by providing our clients with a lifetime of financial well-being solutions through a modern platform with an improved customer service,” said Darfoor.
Sapiens is a leading global provider of software solutions for the insurance industry and is listed on the Nasdaq.
Darfoor said Sapiens would provide Alexander Forbes with a wide range of offerings, including key components of the Sapiens Digital Suite to power Alexander Forbes’ client proposition and enhance its digital capability under this agreement.
Sapiens has a track record of more than 30 years in delivering superior software solutions to more than 400 financial services organisations.
The company has operations in North America, the United Kingdom, Europe, the Middle East, Africa and Asia Pacific.
The core systems are: Sapiens Alis for life and pensions and Sapiens Idit Sapiens Reinsurance for short-term insurance, together with the Sapiens Portal, Sapiens Intelligence and Sapiens Decision for decision management to provide end-to-end, integrated digital capabilities across all lines of business. Sapiens will serve as the primary implementation partner.
“Sapiens’ comprehensive, innovative and digitally rich platform and solution portfolio is the right fit for our organisation.
“The company also has a proven ability to deliver complex projects of this size and scope, which gives our board the confidence that we are making the right long-term decision,” added Darfoor.
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Roni Al-Dor, Sapiens' president and chief executive, said Sapiens’ portfolio would enable a full modernisation and digital transformation, empowering Alexander Forbes to provide a personalised and tailored customer experience and enhanced time to market new products.
“Our modern IT platforms will help fuel Alexander Forbes’ growth and provide it with full and automatic regulatory compliance,” said Al-Dor.
Nolwandle Mthombeni, an equity analyst at Mergence Investment Managers, said the contract would see the companies increasing their usage of technology to run their businesses smoothly.
“Over the last five years we have seen IT play a big role in the evolution of how companies do business. It not only drives efficiency, but also in some instances it drives transactional growth.
“It is no different for Alexander Forbes. By partnering with a global provider such as Sapiens it has ensured systems are to global standards, and in addition, Sapiens specialises in the insurance industry so they will understand what Alexander Forbes’ clients need,” said Mthombeni.
Alexander Forbes shares declined 2.81 percent to close at R6.22.