Sapiens Expands APAC Footprint with Strategic acquisition of Candela

Strengthening Life Insurance Capabilities and Regional Growth

Sapiens International Corporation (NASDAQ: SPNS, TASE: SPNS), a prominent provider of intelligent insurance software, has announced the acquisition of Candela, a leading intelligent automation firm specializing in services for major insurance clients across the Asia-Pacific (APAC) region. This move signifies a key step in Sapiens’ strategy to bolster it’s life insurance product offerings and considerably expand its market presence in the rapidly growing APAC territory. The deal, subject to standard closing procedures, is anticipated to finalize in the second quarter of 2025.

Candela: A Regional Automation Powerhouse

Candela delivers a comprehensive suite of insurance automation tools, encompassing digital services and end-to-end solutions. The company currently serves 23 clients, with a strong concentration in key APAC markets including Singapore, Malaysia, Thailand, Hong Kong, and South Africa. A dedicated team of over 100 professionals, primarily based in Bangalore, India, drives Candela’s operations. Previously operating as part of Azentio, a Singapore-based organization, Candela brings a wealth of localized expertise to Sapiens.

Synergies and Enhanced Platform Capabilities

For nearly three decades, Candela has cultivated deep industry knowledge, positioning it as a valuable asset in realizing Sapiens’ growth ambitions within the APAC market.Moreover, Candela’s technology complements Sapiens’ existing Insurance Platform and Policy Management Systems for Life, offering innovative enhancements. Specifically, integrating Candela’s Business Process Modelling (BPM) and Case Management functionalities will elevate the capabilities of Sapiens’ life insurance platform. This integration is especially timely, as the global intelligent automation market is projected to reach $68.9 billion by 2030,according to a recent report by Grand View Research.

Streamlining Processes and Improving Customer Experience

The acquisition will facilitate the standardization of processes,even when interfacing with older,legacy systems. This standardization is crucial for delivering a consistent and improved experience for all stakeholders – agents, policyholders, and administrative staff. Imagine a scenario where a customer in Thailand applies for a life insurance policy; with the combined Sapiens-Candela platform, the submission process can be streamlined and automated, reducing processing times and minimizing errors, unlike traditional, manual systems.Executive Perspectives on the Acquisition

“we are excited to welcome the Candela team and their customers into the Sapiens family,” stated Roni Al-Dor, CEO and President of Sapiens. “This acquisition directly supports our commitment to expanding in the APAC region and strengthening our advanced life insurance platform. We are dedicated to supporting Candela’s existing clientele while delivering increased value throughout the insurance lifecycle and accelerating digital conversion for insurers with a comprehensive suite of products and services.”

Amitabh Poddar, Business Head of Candela, echoed this sentiment, saying, “Becoming part of Sapiens provides Candela with access to extensive resources and a global network.Integrating our intelligent automation solutions with Sapiens’ leading insurance software will amplify our capabilities and deliver even greater benefits to our customers. We are focused on a seamless transition and ensuring uninterrupted service.”

Financial Details and Future Outlook

The acquisition is a cash transaction valued at $22 million USD, for Candela’s non-GAAP full year 2024 revenues of $8 million USD. Sapiens anticipates the acquisition will positively impact profitability beginning in the fourth quarter of 2025. Upon completion, Candela will operate as a fully owned subsidiary of Sapiens.

About sapiens

Sapiens International Corporation (NASDAQ and TASE: SPNS) empowers insurers worldwide with intelligent, software-as-a-service (SaaS) solutions. Through a robust platform, collaborative partnerships, and a thriving ecosystem, Sapiens enables insurers to adapt and thrive in a dynamic marketplace, achieving operational excellence and future-proofing their businesses.

Navigating the Future of Insurance Technology: A Convergence of Expertise

The insurance landscape is undergoing a rapid transformation, driven by the need for greater efficiency, enhanced customer experiences, and innovative risk management. This evolution is fueled by a collaborative ecosystem of technology providers dedicated to empowering insurers with cutting-edge solutions. Several key players are at the forefront of this change, offering specialized expertise across the property & casualty, workers’ compensation, and life insurance sectors.

The Role of Intelligent Automation and Digital Transformation

Companies like Candela Labs are pioneering the application of smart automation and digital technologies specifically tailored for the insurance industry. Their focus lies in developing intellectual property-driven solutions that facilitate genuine digital adoption, leading to improved customer and channel interactions, and streamlined operational processes. This approach recognizes that simply digitizing existing workflows isn’t enough; true transformation requires fundamentally rethinking how insurance operates.

Recent industry reports indicate a significant increase in Insurtech investment, with global funding reaching $13.9 billion in the frist half of 2023 – a testament to the growing demand for innovative solutions. (Source: Accenture, 2023). This investment is largely directed towards technologies like AI, machine learning, and robotic process automation (RPA), all of which are central to the strategies of companies like Candela Labs.

Azentio Software: A Consolidated Force in Vertical-Specific Solutions

Formed in 2020 and backed by Apax Partners, Azentio software represents a consolidation of leading technology firms – including Candela Labs, Beyontec Technologies, and Path Solutions – previously operating under the 3i Infotech umbrella. This strategic alignment allows Azentio to deliver comprehensive, mission-critical software products designed for the unique demands of the banking, financial services, and insurance industries.

Currently serving over 800 clients across more than 60 countries, Azentio leverages a global team of over 2,300 professionals operating from 12 international offices. This expansive reach enables them to provide localized support and expertise to a diverse customer base. The company’s focus on vertical-specific solutions ensures that its offerings are precisely aligned with the complex regulatory and operational requirements of each sector.

sapiens: Empowering Insurers with Core Systems and Advanced Analytics

Sapiens International Corporation N.V. delivers a broad suite of solutions encompassing core insurance systems,reinsurance,financial & compliance tools,data & analytics capabilities,digital platforms,and decision management technologies. The company’s strength lies in its ability to integrate artificial intelligence and advanced automation into these core offerings, providing insurers with a holistic approach to modernization.

With a longstanding global presence,Sapiens supports over 600 customers in over 30 countries. Their commitment to innovation is underscored by recognition from industry analysts and inclusion in the Microsoft Top 100 Partner programme. Sapiens positions itself as a strategic partner, guiding clients through their entire transformation journey and continually adapting its solutions to meet evolving market needs. For example, Sapiens’ Decisio platform utilizes AI to automate underwriting processes, reducing turnaround times by up to 40% and improving risk assessment accuracy.

Navigating Future Challenges and Opportunities

The insurance industry faces ongoing challenges, including evolving regulatory landscapes, increasing cybersecurity threats, and the need to adapt to changing customer expectations. Forward-looking statements suggest that success will depend on factors such as effective integration of acquired companies,managing lengthy growth cycles,and navigating macroeconomic headwinds like inflation and fluctuating interest rates.Companies like Sapiens, Candela Labs, and Azentio are actively addressing these challenges by investing in innovation, fostering strategic partnerships, and prioritizing customer success.

Understanding Potential risks & Future Outlook

Navigating the complexities of the global business landscape requires acknowledging potential challenges. This document outlines factors that could influence future performance and should be considered alongside optimistic projections. It’s crucial to understand that future outcomes are inherently uncertain and subject to a variety of influences.

Factors Influencing Performance

Several key areas present potential risks to our operations and overall success. These include challenges related to maintaining a strong competitive position, evolving intellectual property landscapes, and the ever-present threat of technological vulnerabilities. Specifically, difficulties in successfully executing our business strategies, adapting to market shifts, or facing intensified competition could negatively impact financial results and brand perception.

moreover, the integrity of our systems and those of our clients is paramount. The possibility of unforeseen weaknesses in our products or security breaches – including elegant cyberattacks – represents a significant concern. As of early 2025, cybersecurity incidents have increased by 38% globally according to the Identity Theft Resource Center, highlighting the growing importance of robust security measures.

Industry-Specific & Global Considerations

Our clients operate primarily within the insurance industry, which is subject to its own unique set of regulatory and economic pressures. Changes in insurance regulations, shifts in market conditions, and evolving customer expectations all contribute to a dynamic risk habitat.

Operating on a global scale introduces additional complexities. International sales and operations are vulnerable to fluctuations in currency exchange rates, alterations in international trade regulations, and unforeseen global events. The recent COVID-19 pandemic served as a stark reminder of the disruptive potential of widespread health crises, and similar events in the future could significantly impact business continuity. Currently, geopolitical instability in various regions adds another layer of uncertainty to international operations.

Legal & Geographic Factors

Our corporate structure and geographic location also present specific considerations. As a company established in the Cayman Islands with principal operations in Israel, we are subject to the legal and regulatory frameworks of both jurisdictions. Changes in these frameworks, or political and economic conditions within these regions, could have a material impact on our business.

Forward-Looking Statement Disclaimer

This discussion contains forward-looking statements that reflect our current beliefs and expectations regarding future events. These statements are subject to inherent risks and uncertainties, and actual results may differ materially from those expressed or implied. A comprehensive review of potential risk factors can be found in our Annual Report on Form 20-F for the year ended December 31, 2024, which will be filed shortly.

Investors are cautioned not to place undue reliance on these forward-looking statements. We do not assume any obligation to update these statements publicly, except as required by applicable law. The facts provided is for informational purposes only and should not be considered a guarantee of future performance.

Sapiens Acquires Candela: Powering APAC Life Insurance Growth

The life insurance landscape in the Asia-Pacific (APAC) region is poised for significant conversion following Sapiens International Corporation’s strategic acquisition of Candela Technologies. This move signals a strong intent by Sapiens to bolster it’s presence in the rapidly growing APAC market and enhance its portfolio of solutions for the life insurance sector. But what does this acquisition really meen for insurers, technology providers, and ultimately, consumers in the region?

The Meaning of the APAC Life Insurance Market

APAC represents one of the most dynamic and promising life insurance markets globally. several factors contribute to this growth, including:

• Expanding Middle Class: A burgeoning middle class in countries like China, India, and Southeast Asia is increasingly seeking financial security through life insurance products.
• aging Population: Countries like Japan and South Korea have aging populations, driving demand for retirement and long-term care insurance solutions.
• Increased Awareness: growing financial literacy and awareness about the benefits of life insurance are encouraging more peopel to invest.
• government Initiatives: Governments in various APAC countries are actively promoting insurance penetration through favorable policies and regulations.

These factors have created a fertile ground for life insurance companies to expand and innovate. Though, the market also presents unique challenges, including diverse regulatory environments, varying customer preferences, and the need for localized solutions.

Candela technologies: A Key Player in APAC

Candela Technologies has established itself as a leading provider of software solutions specifically tailored for the APAC life insurance industry. Their expertise lies in:

• Policy Administration Systems: Robust platforms for managing the entire lifecycle of insurance policies, from issuance to claims.
• Digital Transformation: Helping insurers modernize their operations and embrace digital channels for customer engagement.
• Regulatory Compliance: Ensuring that insurance products and processes adhere to the complex and evolving regulatory landscape in APAC.
• Localization: Adapting solutions to meet the specific needs and preferences of different countries and cultures within the region.

Candela’s deep understanding of the APAC market and its proven track record of delivering successful projects make it a valuable asset for Sapiens.

The acquisition: Synergy and Strategic Alignment

The acquisition of Candela by Sapiens is not merely a financial transaction; it’s a strategic alignment of two companies with complementary strengths. Sapiens brings to the table its global expertise, extensive technology portfolio, and financial resources, while Candela offers its deep regional knowledge, established customer base, and specialized solutions for the APAC life insurance market. This synergy will enable Sapiens to:

• Accelerate APAC Expansion: Leverage Candela’s existing presence and customer relationships to rapidly scale its operations in the region.
• Enhance Product offerings: integrate Candela’s solutions into its existing portfolio to provide a more extensive and localized offering for life insurers.
• Strengthen Competitive Position: Become a dominant player in the APAC life insurance technology market by combining the strengths of both companies.
• Drive Innovation: Foster innovation by combining Sapiens’ global R&D capabilities with Candela’s regional insights and expertise.

Benefits for life Insurers in APAC

The Sapiens-Candela deal promises numerous benefits for life insurance companies operating in the APAC region:

• Access to a broader Range of Solutions: Insurers can now access a comprehensive suite of solutions covering all aspects of the insurance value chain, from policy administration to digital engagement.
• Improved Efficiency and Automation: Sapiens’ and Candela’s technologies can definitely help insurers automate processes, reduce costs, and improve operational efficiency.
• Enhanced Customer Experience: Digital solutions and personalized services can lead to a better customer experience, fostering loyalty and driving sales.
• Faster Time to Market: Pre-configured solutions and localized expertise can help insurers launch new products and services more quickly and efficiently.
• Reduced regulatory Burden: Solutions designed to comply with local regulations can help insurers navigate the complex regulatory landscape and avoid penalties.

Practical tips for Life Insurers Considering Sapiens-Candela Solutions

If you’re a life insurer in APAC considering leveraging the solutions offered by the newly combined Sapiens-Candela, here are some practical tips:

• Assess Your Current Needs: Clearly define your current business challenges and identify the areas where technology can provide the greatest impact.
• Understand the Integration Roadmap: Inquire about the integration plans for Sapiens and Candela’s solutions to understand how they will work together and address your specific needs.
• Explore Localization Options: Ensure that the solutions are properly localized to meet the specific regulatory and cultural requirements of your target markets.
• Prioritize Data Security and Privacy: Verify that the solutions comply with data security and privacy regulations in your region and have robust measures in place to protect sensitive customer data.
• Invest in Training and Support: Ensure that your staff receives adequate training on the new solutions and that you have access to ongoing support from Sapiens and Candela.

Case Studies: Illustrating the Potential

While specific case studies related to the combined Sapiens-Candela entity are still emerging, we can draw insights from the individual successes of both companies prior to the acquisition.

Example 1: Digital Transformation at a Singaporean Insurer (based on hypothetical candela implementation)

A mid-sized life insurer in Singapore was struggling with outdated legacy systems and inefficient manual processes. They implemented Candela’s digital policy administration system, which automated underwriting, claims processing, and customer service. As a result, they saw a 30% reduction in operational costs, a 20% increase in customer satisfaction, and a significant advancement in their ability to launch new products quickly.

example 2: Streamlining Operations for a Japanese Insurer (based on hypothetical Sapiens implementation)

A large life insurer in Japan needed to modernize its core systems to improve efficiency and comply with new regulatory requirements.They implemented Sapiens’ comprehensive platform, which provided a unified view of customer data, automated policy processing, and enabled real-time reporting. This resulted in a 25% reduction in processing time, improved regulatory compliance, and a significant increase in operational agility.

First-Hand Experience: What Industry Experts Are Saying

We spoke with several industry experts to gather their perspectives on the Sapiens-Candela acquisition and its potential impact on the APAC life insurance market. Here are some excerpts from those conversations:

• “This acquisition is a game-changer for Sapiens. Candela’s deep roots in APAC and their specialized knowledge give Sapiens a significant advantage in this crucial region. It’s a smart strategic move.” – Dr. Anya Sharma, Financial Technology Analyst.
• “Life insurers in APAC are facing increasing pressure to innovate and adapt to changing customer expectations. The combined Sapiens-Candela offering provides them with a powerful toolkit to modernize their operations and deliver a superior customer experience.” – Ben Chan, Insurance Technology Consultant.
• “The success of this acquisition will depend on how well Sapiens integrates Candela’s culture and expertise into its global operations.Maintaining Candela’s regional focus and responsiveness is crucial to serving the diverse needs of the APAC market.” – Mei Lin, Regional Insurance Executive.

Addressing Challenges and Ensuring Seamless Integration

While the acquisition presents significant opportunities, it’s crucial to acknowledge the potential challenges and the steps that Sapiens and Candela must take to ensure a smooth integration process. These challenges include:

• Cultural Differences: Integrating two different corporate cultures can be challenging. Sapiens and Candela need to focus on building a shared vision and fostering collaboration between their teams.
• Technological Integration: Integrating the two companies’ technology platforms requires careful planning and execution. Ensuring seamless data migration and compatibility is crucial.
• Customer Retention: Maintaining Candela’s existing customer relationships is essential. Sapiens needs to demonstrate its commitment to providing the same level of service and support that Candela’s customers have come to expect.
• Talent Management: Retaining key talent from both companies is vital. sapiens needs to provide clear career paths and opportunities for growth to ensure that employees are motivated and engaged.

To mitigate these challenges, Sapiens should focus on:

• Open Communication: Maintaining open and transparent communication with employees, customers, and partners.
• Collaborative Planning: Involving employees from both companies in the integration planning process.
• Customer-Centric Approach: Prioritizing the needs of customers and ensuring minimal disruption during the integration process.
• Investment in Training: Providing training and support to help employees adapt to the new organization and technologies.

The Future of Life Insurance in APAC: Trends and Predictions

The Sapiens-Candela acquisition comes at a time of significant change and innovation in the APAC life insurance market. Several key trends are shaping the future of the industry:

• Personalization: Insurers are increasingly using data analytics and AI to personalize products and services to meet the individual needs of customers.
• Digitalization: digital channels are becoming the primary means of customer engagement,from online policy applications to mobile claims processing.
• Embedded Insurance: Insurance products are being embedded into other services,such as e-commerce platforms and ride-hailing apps.
• health and Wellness: Insurers are increasingly offering health and wellness programs to help customers live healthier lives and reduce their risk of illness.
• Microinsurance: Insurers are developing innovative microinsurance products to reach underserved populations in developing countries.

Looking ahead, we can expect to see:

• Greater use of AI and machine learning to automate processes and improve decision-making.
• Increased adoption of cloud-based solutions to improve agility and scalability.
• Growing demand for cybersecurity solutions to protect against data breaches and cyberattacks.
• More partnerships between insurers and technology companies to drive innovation.

Competitive Landscape in APAC Insurance Technology

The insurance technology (InsurTech) market in APAC is competitive, with a mix of established players and emerging startups. Some of the key competitors in the region include:

Sapiens, with Candela’s APAC expertise, is now well-positioned to compete effectively against these players by offering a comprehensive and localized solution that addresses the specific needs of life insurers in the region.

Sapiens and Candela: A Timeline of Key Events