Gartner Research

Best Practices for Negotiating P&C Modular Core Solution Licenses

Published: 12 January 2016

ID: G00278621

Analyst(s): Jeff Haner

Summary

Licensing P&C modular core solutions happens infrequently in the careers of insurance IT leaders, many of whom have little prior experience dealing with this market. This note outlines best practices for negotiating P&C core solution licensing and securing key financial and nonfinancial concessions.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • Agree With the Vendor on License Payment Schedules That More Fairly Reflect the Reality That a Substantial Amount of Time Will Pass Before You Will Realize Any Business Value From Your Investment in Their System
  • When a Vendor Is Unwilling to Give Pricing Concessions, Consider Options Such as Adopting Outcome-Based Pricing or Extending the Term in Order to Gain Flexibility With Licensing Terms or Eliminate Additional Costs or Penalties That May Arise
  • Strike Completely or Significantly Modify Language Dealing With Use of Company Logos, Software Audits, Deployment Environment Limitations, or Use of Third-Party Consultants or Contractors to Insure That Duties Imposed Upon the Buyer, Remedies and Benefits Are Appropriate
    • Use of Customer Logos
    • Software Audits
    • Restrictions on the Number of Environments
    • Restrictions on Use of Third-Party Consultants or Contractors

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