In another move to beef up its strategy in the insurance sector, Oracle has bought Skywire Software's application business for an undisclosed sum, the company announced Monday.

The move follows Oracle's May announcement that it plans to buy AdminServer, which makes policy lifecycle management software for the insurance industry.

Skywire Software has 1,450 customers, according to a statement. In addition to insurance companies, the company also focuses on the legal and financial services verticals.

Oracle said the Frisco, Texas, company's specialized technology, which includes software for connecting insurance agents, brokers and carriers, will complement its own insurance, CRM (customer relationship management) and content management products.

The deal is expected to close in the second half of this year, and does not include Skywire's business process outsourcing business or its iWave IT automation software, Oracle said.

Oracle previously announced the creation of a new global business unit focused on insurance. Skywire's technology and workers will be moved into this division along with AdminServer's, according to the statement.

Analysts have predicted Oracle's push into insurance will kick off a wave of consolidation and responsive moves from the company's competitors, such as SAP.

A rich prize is at stake. The insurance software market is worth between $2 billion and $4 billion, said

The purchase "immediately gives Oracle a set of assets and technology that crosses a lot of different areas of insurance software," said Matthew Josefowicz, director of the insurance practice at the research firm Novarica, in an interview on Monday.

But it may yet continue its shopping spree, according to a Novarica research note.

There are more than 200 companies in the market, ranging from large portfolio players such as Accenture and Fiserv to many small vendors, according to the note.

"While SAP has attempted to build its way into this position for the past few years, Oracle looks to be striving towards the same goal with a buy strategy," the note states. "We expect them to buy more assets in this space in the next 6-12 months."

"We expect that SAP will reconsider its build vs. buy strategy if it decides to seriously compete with Oracle in the US insurer market, especially the mid-market," it adds. "We believe that Microsoft is unlikely to directly enter the market, while IBM may reconsider its strategy depending on the level of traction that Oracle achieves in the marketplace."

Oracle's announcement comes just days before its scheduled year-end earnings call, and about a week after it pushed through a number of significant price hikes on its products.

The company's stock was trading at $22.27 in late trading Monday.

This story was updated on June 23, 2008