November 2018 Bridgepoint Insights

Insurance Technology Update

Innovation and Technology Fuel Activity

Executive Summary Key Takeaways § Insurtech transaction count and funding volume § Last twelve month transaction count is up 25.7% and has increased substantially since 2012 funding volume up 34.0% on a year-over-year basis

§ The Q2-15 spike was on the back of mega-rounds § The Life and Health (L&H) industry made up over 60% to online benefits software and health of the transactions between 2012-2015 brokerage Zenefits and online P&C insurance seller Zhong An § In recent years, this trend has reversed to the Property & Casualty (P&C) industry, accounting for § Compared with Q2-17, deal count in Q2-18 over 65% of total financings since 2016 increased by 10.9%, while funding volume declined by 41.2% indicating a higher § These activity levels have created opportunities for concentration of smaller rounds early-stage capital raises and advisory on strategic acquisitions by insurance incumbents looking to buy technology, rather than license or create

Insurance Technology Financing & Transaction Volumes

$2,000 Quarterly Investment Activity 80 Transaction Median $26.5 Transactions $1,500 Volume Median ($mm) $255.5 60

$1,000 40

$500 20 Volume ($mm) Volume $0 0

Volume ($mm) Transactions

Transaction Composition 80 60 40 20

Transactions Transactions 0

P&C L&H

(1) Investment activity statistics comprised of selected transactions from January 1, 2012 through June 30, 2018. Sources: Bridgepoint , Capital IQ, PitchBook, CB Insights Bridgepoint Investment Banking is a division of Bridgepoint Holdings, LLC. Securities offered through an unaffiliated entity, M&A Securities Group, Inc., member FINRA/SIPC bridgepointib.com 1 November 2018 Bridgepoint Insights

Insurance Technology Update

Transaction Spotlight: Life Distribution

Executive Summary Key Takeaways § Driven by growing interest in life distribution, § Insurtech distribution companies will continue to play investment activity in the life industry significantly a key role in the future development of the industry increased in 2018 § Modernizing the life insurance industry is a core goal § CB Insights, in their Q2-2018 Insurance Tech of insurance technology firms, through the use of quarterly briefing, identified four life distribution predictive analytics, digital marketing, and various transactions that illustrate a few key themes data tools to simplify and streamline and optimize the selling the process § Four $10mm+ funding (highlighted below) represent an evolution towards simple, § The increased size of nonincumbent investment into straightforward and flexible products that are insurtech may ultimately result in better funded easier to distribution online, direct to consumers companies that will enable true industry disruption rather than marginal process improvements § Additionally, these companies are utilizing data analytics in underwriting

Capital Raised $mm

Company Business Description Round Total Investors § Goal of modernizing the life $40 $56 8VC, Allianz Life Ventures, Barney insurance process Schauble, Canaan Partners, § Leveraging third-party data Ladder Lightspeed Venture Partners, Nyca is able to offer life insurance Partners, RRE Ventures, Thomvest (Series B) coverage directly online to those Ventures who qualify § Life insurance provider that uses $12 $12 ARRIVE, Downey Ventures, Durant technology and predictive analytics Company, Roc Nation, Sequoia to modernize the life insurance Capital, Silicon Valley Bank, Smith (Series A) process Family Circle, Stanford University § Uses predictive analytics to identify $15 $18 8VC, Core Innovation Capital, risk and give consumers access to Morpheus Ventures, New Enterprise comprehensive life insurance Associates, Valar Ventures (Series A) solutions § Life insurance for accidental death, $10 $13 Bessemer Venture Partners, including car, bike, commercial air BoxGroup, Brainchild Holdings, crashes, fire and murder Maveron, Red Sea Ventures, RGAx, (Series A) § Policies are issued by Vantis Life Silicon Valley Bank

(1) Investment activity statistics comprised of selected transactions from January 1, 2012 through June 30, 2018. Sources: Bridgepoint Merchant Banking, Capital IQ, PitchBook, CB Insights Bridgepoint Merchant Banking is a division of Bridgepoint Holdings, LLC. Securities offered through an unaffiliated entity, M&A Securities Group, Inc., member FINRA/SIPC bridgepointib.com 2 Insurance Technology Update – November 2018

Industry Overview & Trends Strategic Acquisitions

§ The insurance industry is dominated by § Acquisitions are critical to insurance companies seeking longstanding financial institutions that have innovative solutions in an increasingly competitive industry historically relied on antiquated business models with outdated processes plagued by § The ability to leverage data has yet to be fully utilized, duplicated efforts from employees handling creating opportunities for analytics companies to improve onboarding, claims, agent support, customer underwriting and risk management practices service and underwriting tasks § New industries will continue to create opportunities for niche § The shift toward online sales platforms has insurance products including self-driving cars, commercial gained traction, leaving traditional agents drones, cyber attacks, identity theft, etc. feeling the pressure to evolve and embrace § Customer satisfaction and retention platforms are becoming change. A carrier and agent’s ability to create attractive in an industry known for low satisfaction rates sales opportunities through social media and despite high marketing spend other online platforms is the new battleground § New platforms and processes including on-demand, short- § Data and analytics are now being applied to term and usage-based policies, satellite imagery, improved processes ranging from sales to underwriting to comparison and sales platforms, and user-friendly web improve effectiveness, customer retention, interfaces are having commercial success quality, risk management and other areas of § Given the size of the industry, and failure to create operations compelling digital advances, the sector remains ripe for disruption from startups / VCs and strategic investors

Insurance Technology Investors § Strategic investors and acquirors include largely insurance 8% carriers but also firms specializing in data analytics, digital 20% marketing and an array of tech-related services 12% Strategic § The presence of strategic investors in insurtech has grown rapidly, as industry incumbents have begun recognizing the need to innovate and involve PE § Established tech companies are also investing in creating Corporate VC internal insurance tech startups and partnerships, such as 60% Google’s recent auto-insurance comparison / sales platform and Amazon’s multiple in P&C

Insurance Technology Companies 3% § The products and services emerging in the insurance tech industry cover all facets of the business with process 12% Process Improvements improvements and sales platforms capturing 69% of the 33% total deal activity Sales Platform 16% § Insurance online experience ratings have been below both Software Development retail and airlines historically, clearly supporting the need for process and platform improvements Analytics § Investment in software development and data analytics have exponentially grown the amount of data that can be 36% IT Services used to underwrite and market insurance products

Note: Investment activity statistics comprised of selected transactions from January 1, 2012 through June 30, 2018 Sources: Bridgepoint Merchant Banking, Capital IQ, PitchBook, CB Insights bridgepointib.com 3 Insurance Technology Update – November 2018

Transaction Deal Sizes

§ Transaction sizes in this space range from seed2 funding to >$500mm rounds with 46% of transactions under $3mm 6% < $1mm and 21% of transactions under $1mm 13% 21% $1mm to $3mm § The solutions and innovations taking place in early stage investments today will likely take years to transpire, but are $3mm to $15mm a preview of what the industry could look like 25% $15mm to $50mm 35% § The innovations seen today may be in their infancy; > $50mm however, those that are able to scale aggressively will become the transformative businesses and will likely lead to sizable transactions in the future Company & Investor Geographic Locations

Top 10 States by Transactions State Companies Investors California 99 108 39 37 Pennsylvania 23 17 Massachusetts 21 15 7%6% Illinois 18 23 7% 39% Texas 17 11 13% Florida 13 6 14%14% Washington 12 6 Colorado 8 4 Connecticut 8 8

Note: There were 243 international companies or lead investors involved in US transactions. Data January 1, 2012 through June 30, 2018 0 1 2 - 4 5 - 9 10 - 19 20 - 40 > 40

Selected Recent Insurance Technology Investment Activity Company Investor Investor Round Date Company Location Lead Investor Location Type Sector ($mm) 6/28/2018 Bind On-Demand Health Minnesota Lemhi Ventures, Inc. Minnesota PE LH $10 6/25/2018 PolicyBazaar India SoftBank Capital Japan Corporate VC PC 200.0 6/19/2018 Fabric Technologies New York RGAx Missouri Strategic LH 10.0 6/14/2018 Ethos California Durant Company California VC LH 11.5 6/12/2018 Digital Insurance Group Netherlands Zurich Insurance Group Switzerland Strategic PC 17.6 5/28/2018 Acko General Insurance India Amazon Washington Corporate VC PC 12.0 5/21/2018 Gravie Minnesota FirstMark Capital New York PE LH 3.4 5/21/2018 Bestow Texas Valar Ventures New York VC LH 15.0 5/8/2018 simplesurance Germany Allianz X Germany Strategic PC 24.0 5/7/2018 Beam Dental Ohio Drive Capital Ohio VC LH 22.5 4/30/2018 LeaseLock California Wildcat Venture Partners California VC PC 10.0 4/26/2018 EverQuote Massachusetts Savano Capital Partners Maryland VC PC 0.5 4/18/2018 Coverfox India IFC Washington, DC VC PC 7.0 4/11/2018 At-Bay California Khosla Ventures California VC PC 13.0 3/28/2018 Oscar Health New York Founders Fund California VC LH 165.0 3/27/2018 Root Insurance Ohio Redpoint Ventures California VC PC 51.0 2/20/2018 Bind On-Demand Health InsuranceMinnesota Lemhi Ventures, Inc. Minnesota PE LH 60.0 1/10/2018 Ladder California RRE Ventures LLC New York VC LH 30.0 1/9/2018 Panda Insurance China QF Capital China PE PC 7.7 1/3/2018 Quilt Massachusetts NextView Ventures Massachusetts VC PC - 12/19/2017 Lemonade New York SoftBank Japan Corporate VC PC 120.0 (2) PC = Property & Casualty Insurance; LH = Life & Health Insurance; Sources: Bridgepoint Merchant Banking, Capital IQ, PitchBook, CB Insights bridgepointib.com 4 Insurance Technology Update – November 2018

About Us Geographic Focus Area

§ $103+ billion of M&A and capital raising experience § 43 completed M&A assignments spanning more than $30 billion § 77 completed corporate finance transactions, raising more than $73 billion in capital § 186+ years cumulative investment banking & experience § 2008 vintage tech-focused private equity fund § Principals currently sit on 11 Boards

Selected Insurance and Technology Transaction Experience

USD5.0 Million Not Disclosed Not Disclosed USD10.0 Million Not Disclosed Strategic equity investment Bridge debt capital raise Sell-side Advisor Preferred stock offering Buy-side advisory and from Fortune 500 Food & USD4.0 million acquisition financing for Agribusiness Company Equity capital raise management

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