We found five things that overseas vendors need to, and often do, bring to the North American market:

A serious, long-term commitment in terms of investment, support, and sales.

An expertise in dealing with three areas Americans dont usually deal with: multiple currencies, languages, and customs. (Would you know what not to do with your left hand in Turkey?)

Some of the great technology that Americans have been hearing about for the last decade, particularly analytical tools and wireless services.

- A broad knowledge of the worldwide insurance industry, particularly from the London market perspective.

The ability to help an American insurer become a global player.

The Europeans arent just coming, theyre already here. And a new one seems to be stepping up to the plate (or, if you prefer, stepping in front of the wicket) every day. One of the latest is Data Distilleries (www.datadistilleries.com), a Dutch company that opened offices in New York and San Francisco last October. Its analytical CRM product has been a success in Europe, according to Marcel Holsheimer, president and founder. The company chose to secure some U.S.-based partners as a way of entering the North American market. Others have chosen to purchase a U.S. firm. Still others have taken what is probably the most difficult routthe one selected by Sherwood International (www.sherwood.co.uk): Back in 1996, it came here armed only with its Amarta product and a sales pitch.

Of the half dozen companies we spoke with, all believe they have built the better mousetrap for American insurers, but the difficulty for them lies in getting the word out on their product to this massive market.

That First Step Is a Doozy

Michael LaPorta is global leader of insurance practices for Deloitte Consulting and was involved in Sherwoods move to the U.S. Hes currently working with another European vendor thats close to announcing its entry into the U.S. market.

American [insurance] companies have to believe there is a level of commitment from the European companies, LaPorta said. That means more than opening a sales office. One sales guy is not sufficient, he said. You need a real team. This market is so much bigger than Europe. There is more opportunity for them, but you need more than just one sales rep in an office.

But what about the renewed American patriotismwhat some might call isolationism? LaPorta doesnt believe American insurance carriers are worried about where its vendors call home. Companies need to believe that the vendor is real and that they [wont be] the only one using the product, he said.

Bill Rich, an independent consultant for Sherwood, has worked with the company since it entered the U.S. market back in 1996. He believes Sherwoods commitment to its U.S. customers has been the key to its success. You have to put your money where your mouth is, Rich said.

LaPorta is heartened by the fact that Sherwood has a users group among its North American customers, and it has proven to be beneficial for a technology company without a long history in this market. The carriers here in the U.S. are able to share best practices on installations and other aspects of the product, he explained.

By demonstrating that Sherwood was here for the long haul, the company was able to alleviate any misgivings carriers might have about dealing with a new player. What carrier wants to make a commitment if the vendor is going to shut down in North America and go back home? Rich asked.

The C Word

Mark Hobart, CIO for the Sirius Group (www.siriusgroup.co.uk), knows firsthand how a lack of commitment can hurt. His company found out the hard way when it attempted to enter the South African market with just a sales force. The opportunity was there, but it was difficult to establish ourselves with just a sales force, he said. Sirius eventually pulled out of South Africa and made sure not to repeat that business plan when it came to the United States.

Sirius based its U.S. push on successes it had in the Caribbean, Africa, and the Far East. It began to develop its plan for North America in the mid-1990s. This time, the company chose to establish itself on a new continent through acquisitions of American vendors, most notably Policy Master. We needed a company with the skills on the ground in the U.S. to tap into, said Berney Bradley, vice president product development for Policy Master. In January, Policy Master re-branded itself as Sirius Financial Systems to fall in line with the corporate identity.

Rebus (www.rebusis.com) also believes that support people make the difference for a company entering a new market. Its U.S. operation employs about 60 people, but Gavin Hunter, chief operating officer for those U.S. operations, said he is the only sales representative in the U.S. Sixty is a nice team to manage, he said. Development is still done in Europe and India, so the North American staff supports North American customers. (Of the companies we contacted for this story, Rebus was the only one that is no longer owned by European investors. It was purchased by American venture capitalists, including General Atlantic Partners.)

The Innovation Group (TiG, at www.tigplc.com) also makes it clear that its commitment to the U.S. market is serious. The company spent close to $500 million in acquisitions as it prepared to enter the United States, according to Bill Hickey, president of U.S. e-insurance for TiG.

Show Them the Monies

Its been a long time since Americans have had to deal with multiple currencies (although some would argue it was as late as 1865), and except for converting the occasional Canadian dollar, working with anything other that greenbacks is a bit out of the ordinary.

But even as Europe finds itself with a common currency, the world does not. And American carriers looking to expand their businesses across the Atlantic or Pacific will need to be comfortable withand their systems will need to be capable ofdealing with dinar, euros, forint, kroon, levs, pesos, pounds, schilling, yen, and who knows what else.

Knowledge of multiple currencies and cultural standards make the European vendors stand out for American companies interested in entering the global market. The international insurance market is not driven by standards the way North America is. Flexibility is king, Hunter said. You have to be light on your feet to meet the needs of the customers.

Although Rebus is not driven by American companies looking to go global, Hunter admits, When people want to go that way we win hands down. We have a healthy mixture of clients.

European vendors are different than their American counterparts, but Hunter knows that Rebus has to adapt as well. The world doesnt operate the same as London, he said. That was part of the learning process when Rebus came to America 15 years ago. We had five very ugly years of learning, the next five years were much better, and the last five years have been a delight.

Policy Masters Bradley agreed that flexibility is a valued trait in Europe. Its easier to get the software to be flexible than the customer, he said.

The flexibility continues as the new parts of the company evolve. Mergers and acquisitions create a new dynamic for a company, particularly when a major part of the restructuring is adding a market as large and diverse as North America.

Earning credibility with consultants and customers was the key first step for Sherwood. In 1997, Deloitte recommended Sherwoods Amarta product to Northwestern Mutual Life. The product had been deployed internationally in eight or 10 countries, according to Rich. Its international flavor is one of the factors that enticed NML and other American insurers to European vendors.

Its quite likely that many American insurers dont know theyre dealing with a European-based vendor at the initial meetings, but Rich doesnt think theres any reason to hide the fact. I dont think anyone is trying to Americanize their name, he said. No one comes up with kitschy names for products anymore. If you are going to be a global player, you have to be adaptive to any environment.

Ahead of the Curve

Technology is truly global, butdespite how many Americans might see thingsEuropeans have been deploying it well for much longer than their American counterparts. As Hunter put it, What was happening 10 years ago in Europe is what is happening today in North America. While the U.S. may not be a decade behind, it is clear that some issues have already been dealt with over there that American companies cant quite get a handle on. The most obvious example is wireless technology, which has always been a stepand a year or twoahead in Europe than in the States.

Policy Master benefited from Siriuss European technological expertise, according to Hobart; the combination of technical skills and business analysis has kept the company focused. Hobart said the support team was supplemented by additions from the UK, although the development staff remained in England.

Bradley added, Its amazing to me that in the U.S. the systems are so fragmented. Were not used to the multiple components like you have here. Our product is set up to handle everything with a powerful set of technology. When we have gone up against U.S. products in other countries we win on functionality every time.

Data analytics is another area in which European companies feel they have an edge. For example, there is hardly a shortage of CRM solutions in this country, but when Data Distilleries made the decision to join the fray, the company decided to launch the new version of its product at the same time it entered the American market, hoping to have its products analytics stand out in its new market, Holsheimer said. (The company had achieved some success in Europe working with claims departments; its analytical system uncovers patterns of fraud, giving high or low probability to whether a claim might be less than kosher.)

The decision to push Data Distilleries analytics came after Holsheimer visited the U.S. in early 2000 to meet with consultants and other vendors. They told me there was a huge need for analytics here, he said. That in mind, in August 2000 Holsheimer was able to secure investors; one of them was Accenture, which took a stake in the company and introduced Holsheimer to its clients. Data Distilleries has also hooked up with Siebel. The partnerships have been a blessingHolsheimer expects to grow to four or six offices in the next few years. (The company currently has offices in New York and San Francisco.) This is a huge market here, but we wanted to be very sure before we moved in, Holsheimer said. We knew we could be successful, but partners are crucial for us.

Knowing the Industry

The European insurance market, particularly in London, is like a fraternity. Businesses are concentrated in one geographic area in London, and that means communicationformal and informalis a daily occurrence. Hunter believes that familiarity has bred a stronger knowledge of both software and insurance by those dealing with one another.

The London market is localized, Hunter said. There are hundreds of companies located in one area. You sold on your reputation. People simply talked to one another about what worked and what didnt. Thats the environment we grew up in. You can only succeed if you are good. You were forced to build your software in a progressive path. People can hide their sins in the U.S.

International insurance knowledge helps TiG build the best practices into its technology, according to Hickey. Changes are happening globally and our customers need to know how we deal with things such as deregulation, he said. It allows our clients to get a fast start on the way they run their business.

TiG has worked closely with IBM, and that association helped the company establish a strategy for U.S. acquisitions. Within six months of entering the U.S. market, TiG made three major acquisitions: Huon, MTW, and Pyramid.

We are taking the U.S. expertise of these companies plus we are bringing in what we know from Europe, Hickey said. Yes, we have UK headquarters, but we see ourselves as a global company.

Andy McDonald, vice president of TiGs product management group, said the company isnt concerned about the size of American insurers; its used to dealing with top-tier writers with its claims management system. We had some initial success with it in the UK, and we are combining it with what we have here in the U.S.

ROOM Solutions (www.roomsolutions.com) has been in the U.S. market for almost a decade, although at first there was no intent or structured plan, said Kevin Curtis, head of strategic marketing. Most of our business came from brokers referring our product to their customers.

ROOM is unique in its understanding of the insurance business and its project delivery record, he said. Being UK based but active internationally provides customers with a breadth of understanding of how, essentially, the same business is conducted differently in international markets, Curtis said. In reinsurance and large commercial risk insurance, geography has little impact, but cultural sensitivity is paramount. (Curtis said that ROOM is contemplating further expansion into the North American market, but didnt elaborate.)

Its a Small World

For many of the reasons European software vendors are headed to North America, American insurers are looking to make their presence felt around the globe.

Hunter said the strategy for success in the U.S. was fairly simple. Its a large, dynamic market with great revenue opportunitiesif we did things right, Hunter said. The company chose to grow organically rather than through acquisitions. It was less strategy and more evolution, he said, but coming to America presented quite a challenge. We did well in Europe, but you always wonder if you can replicate that in the North American market, he said.

American companies are no longer satisfied with their own market and have looked to other nations for opportunities. European vendors such as Sherwood are able to show their expertise in language, culture, and monetary units that many American vendors simply dont have.

Sherwood has returned the favor to American insurers by investing in their new market as well. Armed only with their own product five years ago, Sherwood has since acquired several American vendors, expanding into the reinsurance and property/casualty markets.

The company didnt come to North America with a plan to acquire other vendors, but Rich believes every business plan is subject to change. By making a financial commitment in this country, he feels Sherwood has earned the respect and trust of customers and potential customers.

As the global insurance market has become even more of a factor for U.S. carriers, they will continue to look for expertise from our European neighbors. Familiarity with technology; foreign currency, languages, and customs; and the nuances of the global marketplace makes these vendors valuable partners both here and abroad.

Its easy to see why European software developers have such an interest in the U.S. market. The challenge for both European vendors and U.S. carriers will be to find the right combination of technology, commitment, and flexibility to allow both sides to shine, not only on these shores, but over there as well.

Over There

One European vendor we contacted is not quite ready to make the commitment to come to America. Aspect Software (www.htmect.ie) is based in Dublin and has a suite of customer process management products for insurers.

Aspect has been rated as one of Europes top 100 emerging technology companies, but company representative Feargal Duffy said Aspect is not quite ready to join the European invasion just yet. There are still enough [insurance] companies here in Europe to allow us to be successful, he said. We cant ignore America forever, though.

Aspect does venture beyond its Irish borders. It has had 40 installations in eight countries, according to Duffy. But coming to the U.S. would involve a major marketing campaign. Its far easier to sell with references than it is to enter the U.S. market, according to Duffy. A lot of companies opened offices [in the States] and shut down in 12 months without any sales.

Aspect examines its business strategy all the time, Duffy said, and thinks Aspect will enter the U.S. when the markets right.

In This Story

Data Distilleries

www.datadistilleries.com

International headquarters: Amsterdam

U.S. offices: New York, San Francisco

Company information: Data Distilleries offers open analytical CRM solutions. Its DD Series analyzes cross-selling opportunities and offers a claims solution that helps adjusters detect possible fraud.

The Innovation Group

www.tig.com

International headquarters: Whitetley, Hampshire, England

U.S. office: Danbury, Conn.

Company information: The Innovation Group offers a variety of insurance products, ranging from an imaging solution to a claims system. Its Innovative Proposition Management Solution offers an integrated approach to personal lines management.

Policy Master

www.siriusgroup.co.uk

International headquarters: London

U.S. office: Denver, Co.

Company information: Policy Master specializes in agency automation systems for the MGA market. Its flagship product, General Agency Automation System, manages all aspects of administration and accounting. Through its parent, the Sirius Group, it also offers Sirius for Underwriters, a back-office administration and accounting system for carriers, and Gemininet, an electronic rating engine.

Rebus iS

www.rebusgroup.com

International headquarters: London

U.S. office: Secaucus, N.J.

Company information: Rebus offers solutions for the insurance and reinsurance sectors as well as for agents. It has also developed e-business tools for the insurance and financial services fields.

ROOM Solutions

www.roomsolutions.com

International headquarters: London

U.S. office: Noneyet.

Company information: ROOM offers Subscribe 2000, a core administration system that allows carriers to plan, execute, and monitor insurance business with a single application. It also offers business analytics and risk analysis solutions.

Sherwood International

www.sherwoodinternational.co.uk

International headquarters: London

U.S. Offices: Hartford, Chicago, New York

Company information: Sherwood provides software and solutions to the global insurance industry. Its best-known product is Amarta, a business process implementation environment designed specifically for the insurance industry. It also has e-business architecture for commercial lines, international risk, and professional reinsurance as well as management and administration systems for carriers.