Virginia-based software major Computer Sciences Corp. (CSC) recently inked a licensing and maintenance deal with a developing insurance company. Under the terms of the deal, Computer Sciences will license the insurance carrier’s New Business Accelerator (nbAccelerator) and Insurance Optics Business Analytics solutions.
 
The deal reflects a long-standing relationship between the two companies, since the carrier is already using Computer Sciences’ policy administration system, CyberLife. Launched in 1996, CyberLife is a life insurance policy administration system, which helps life insurers reduce the time to market on their insurance products and lower their software costs.
 
The insurance provider will integrate the two software applications with the previously licensed CSC application, CyberLife. nbAccelerator, which will facilitate acquisition of new insurance business, will simplify the insurance company’s activities relating to submission of form and processing of various insurance policies. On the other hand, the Business Analytics application will help the company to quickly access business and customer data for analysis.
 
Though financial details were not divulged, Computer Sciences will no doubt benefit from the insurance carrier’s trust vested in its software applications.
 
Computer Sciences is regularly winning deals from different industrial sectors as well as government verticals. Recently, the company signed a deal with the U.S. Department of Transportation’s Research and Innovative Technology Administration. Computer Sciences also received a delivery contract from an intelligence community agency to provide information technology services to two new sites in San Antonio,Texas and Augusta.
 
We believe that Computer Sciences is enjoying good business flow from the mainstream industry, but the outsourcing industry looks disappointing. Sluggish bookings and weak order renewal rates suggest relatively slower growth for the Outsourcing segment in 2011.
 
Moreover, intense competition in the IT and cloud computing space from players such as Accenture Inc. (ACN) and Hewlett-Packard Co. (HPQ) are threats. However, we are encouraged by Computer Sciences’ focus on cloud-based services based on the belief that both new and existing clients will likely move further in this direction.
 
Currently, we have a short-term Hold rating on Computer Sciences, which equates to a Zacks # 3 Rank.
 
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