Guidewire to buy hyperexponential for $1.7 billion to add AI underwriting

Guidewire Software, the US company whose systems many property and casualty insurers use to run their core operations, said on Tuesday, October 27, 2026, that it has signed a definitive agreement to buy hyperexponential (hx), a London-based maker of AI underwriting and pricing software. Guidewire will pay a base price of $1.7 billion in cash, subject to adjustments, plus up to $400 million more if hx meets recurring revenue targets, putting the total at about $2.1 billion. Guidewire said it expects the deal to close in the second quarter of its fiscal year 2027.

Underwriting is the step where an insurer decides whether to cover a risk and at what price. In commercial insurance, which covers businesses, buildings, ships, factories and supply chains, that work has long relied on spreadsheets, actuarial models (statistical models that estimate the chance and cost of claims) and the judgement of experienced underwriters. Software such as hx's lets insurers build those pricing models on a single platform, run them faster and keep a record of how each decision was made.

Guidewire describes the deal as a move into what it calls "agentic underwriting". An AI agent is software that can carry out a series of steps towards a goal, such as gathering data on a risk, running a pricing model and drafting a quote, rather than answering one question at a time. In Guidewire's description, such agents would work alongside underwriters and actuaries, who still make the final decisions. These are the company's plans and claims; how well such systems perform in practice is not yet shown.

The deal also shows how enterprise software companies are spending to add AI to the systems businesses already depend on. Guidewire's main products handle policies, billing and claims. Adding pricing and underwriting software lets it offer insurers a larger part of the chain in one place, and the contingent payment of up to $400 million shows Guidewire is tying part of the price to whether hx's revenue keeps growing.

Annual recurring revenue (ARR), the measure Guidewire uses, is the yearly value of subscription contracts a software company has in place. The company's forecast splits the expected gain into an "inorganic" part, which comes simply from adding hx's revenue, and an "organic" part, which would come from selling the combined products to more customers.

Short-term: The deal still has to close. Until then the two companies operate separately. Guidewire takes on $1 billion of new debt to pay for it, which investors will watch alongside its growth forecast.

Long-term: If the products are combined as planned, insurers using Guidewire could price commercial risks inside the same system that handles their policies and claims. Rival software makers may respond with their own AI underwriting tools or purchases. For Indian readers, the move shows the direction core insurance software is taking, as general insurers in India also modernise their systems; no Indian insurer is named in the deal.

Who is affected: Commercial insurers and their underwriters and actuaries, hx's staff and customers (mainly in the UK market), Guidewire's customers worldwide, and the IT services firms that implement insurance software for them.

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