Acquisition Brings Changes to Restoration Industry
Software Provider’s Acquisition Means Increased Competition and Questions about Data Safeguards
Acquisitions are a normal part of business growth—one business acquires another in an effort to expand its product and service offerings or geographic regions. Sometimes, acquisitions are made to narrow a field and eliminate competition. No matter the reason behind them, acquisitions can rock an industry and leave some wondering what the move means for others in the field.
Such was the case with the acquisition of Next Gear Solutions by CoreLogic in September 2021. In particular, questions persist regarding how the acquisition affects restorers’ data and information and how CoreLogic may use that information going forward.
While the full implications of the acquisition are yet to be determined, RIA has insights on key questions and what restorers can expect now and going forward.
Next Gear Solutions is the creator of a suite of digital workflow platforms and solutions for the restoration industry like DASH, SettleAssist, and MICA. CoreLogic is a large data aggregation company that works in the real estate and property insurance industries. It’s also the parent company of Symbility, an estimating platform, and one of the few competitors to Xactware’s Xactimate.
Some restorers have questioned how their data will be aggregated and used in the acquisition. Estimating and management platforms and third-party administrators gather a significant amount of data about restorers, making the vulnerability of the data a key concern. RIA’s Advocacy and Government Affairs Committee (AGA) is monitoring not just the use of the data but also how it will be safeguarded.
However, according to Mark Whatley, MCT, XCT, Board President of the nonprofit Actionable Insights, a foundation that preserves the health of the property insurance ecosystem, concerns about data risk might be premature.
“We’ve fielded concerns from our network about data privacy for years” said Whatley. “If you constrain the conversation to data mining and safeguarding, it's just difficult right now for me to connect the dots on how this acquisition presents a great risk to the average restorer. Our largest concerns are centered around the idea that if contractors and adjusters are not intimately familiar with the estimating platform they are using, then underwrites (omissions of warranted line items) may become more prominent, encumbering swift claims settlement and increasing the potential for litigation.”
However, the knee-jerk response of concern may ultimately give way to realizing unintended benefits for the industry.
Creating More Competition
In a press release from CoreLogic, Founder and CEO of Next Gear Solutions, Garret Grey, says that the merger of the two companies “introduces a more compelling alternative to the status quo.”
Xactimate holds the largest share of the estimating software pie, so with the acquisition, Symbility intends to become a larger player in the field.
One way CoreLogic can increase Symbility’s prominence is by having open, honest discussions with the restoration community, much like those between RIA and Xactware in recent years. Those conversations improved contractors’ experience with the Xactimate software and internal pricing database, and RIA hopes the same could happen for those using Symbility (who currently outsources its pricing database to Craftsman Book).
Elevating the competitive landscape for estimating software may also result in added benefits for restorers, such as alternative software licensing fee structures (annual license vs. per estimate cost) and industry-wide clarification on how pricing databases are composed and maintained.
While questions continue to swirl, the potential benefits of the acquisition are apparent for those in the field, and the RIA remains hopeful that CoreLogic will work with the contractor base to provide an improved, accessible product to assist restoration businesses.
Staying Tuned In
The RIA is taking a wait-and-see approach in terms of how the acquisition of Next Gear Solutions by CoreLogic will affect the industry.
Through the AGA, the RIA will keep track of what is happening and continue to advocate for the restoration contractors as the voice of the industry.
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