DXC in Talks to Sell Insurance Business to Eldridge for About $2.4 Billion
Key Facts
DXC Technology is in advanced talks to sell its insurance software and services unit for about $2.4 billion, Reuters reported, citing sources on the October 2026 discussions. The sources identified private investment firm Eldridge Industries as the potential buyer of the business, which combines software and services for the insurance industry. Eldridge is considering merging the business it plans to acquire with its insurance technology platform Zinnia, according to the same sources. The talks thus cover the sale of the unit and a plan to integrate it into the buyer's insurance technology operations. However, the sources told Reuters there was "no guarantee a final agreement will be reached," leaving the potential deal contingent on an agreement between the parties.
Zinnia is part of Eldridge's operations and specializes in life insurance and annuity technology and services, according to the company's description of its business. Zinnia describes its platform as "the core system of record for life insurance and annuities," a field in which it also operates through acquisitions of software assets. It previously announced an agreement to acquire Ebix's life insurance and annuity software assets. That transaction covered the software assets for this business, according to Zinnia's announcement of the agreement. Eldridge's plan under discussion in the DXC talks, according to Reuters' sources, is to combine the company's insurance software and services unit with its Zinnia platform.
DXC's insurance software and services unit generated revenue of $1,279 million in fiscal 2026, according to the company's earnings filing with the U.S. Securities and Exchange Commission. The unit posted a segment profit margin of 10.1% for the same fiscal year, according to the filing. On the contracting front, insurance bookings rose 3.6% from the previous fiscal year. However, the book-to-bill ratio stood at 0.76 times for fiscal 2026. Bookings therefore remained below the unit's reported revenue for the period, despite the annual increase in bookings. These annual insurance business results were part of a company whose total revenue was about $12.64 billion, down 1.8% year on year.
In the first quarter of fiscal 2027, insurance segment revenue rose to $319 million, up 1.9% year on year, according to DXC's quarterly earnings filing. Segment profit also rose to $34 million, an increase of 3.0% from the same quarter a year earlier. Quarterly segment profit growth outpaced revenue growth in the insurance business over the same period. By contrast, the book-to-bill ratio was 0.54 times, compared with 0.76 times for the full fiscal 2026 year. Across DXC as a whole, quarterly revenue totaled $3.00 billion, down 5.1% year on year. The insurance segment thus recorded growth in revenue and profit while the company's overall revenue declined in the first quarter.
The sale talks in October coincided with DXC's continued development of its insurance offerings, as it announced during the same month that use of its Assure platform had expanded to more than 275 clients. In its insurance business development announcement, the company said its intelligent applications had 18 clients supporting more than 450 insurers. The first figure relates to platform clients, while the other figures relate to intelligent application clients and the insurers they support, according to the company's description of each group. Ray August, president of insurance software and business process services at DXC, said the company helps clients modernize according to their needs. August described its approach as "helping clients modernize according to their needs and extending the value of their existing investments," as part of the insurance business development announcement.
On its financial position, DXC said in its annual report that it reduced debt by about $500 million during fiscal 2026. The debt reduction came during a year in which the company's overall revenue declined, before another year-on-year revenue decline in the first quarter of the following fiscal year. For fiscal 2027, guidance published alongside that quarter's results projected annual revenue of between $12.10 billion and $12.35 billion. Both ends of that range are below the revenue the company recorded in the previous fiscal year, according to the figures in the two earnings filings. This guidance represents the company's forecasts for fiscal 2027, while talks to sell the insurance business remain advanced without any guarantee of a final agreement, according to Reuters' sources.