September 2016 Financial Technology Partners Prepare for the InsurTech Wave Overview of Key Insurance Technology Trends The Only Investment Bank Focused Exclusively on Financial Technology © 2016 Steve McLaughlin Founder & CEO OVERVIEW OF FT PARTNERS Tel: 415.992.8880 [email protected] FT Partners – Focused Exclusively on FinTech www.ftpartners.com • Financial Technology Partners ("FT Partners") was founded in 2001 and is the only investment banking firm focused exclusively on FinTech with offices in San Francisco and New York • Founder and CEO, Steve McLaughlin, was formerly a senior investment banker in Goldman Sachs & Co.'s Financial FT PartnersTechnology –GroupFocused and Financial Exclusively Institutions Group on inFinTech New York and San Francisco • Named Investment Banking Firm of the Year in 2016 & Deal maker of the Year in 2015 along with Deal of the Decade and many more industry awards and accolades FT Partners’ Advisory Capabilities FT Partners’ FinTech Research Named Silicon Valley’s #1 FinTech Ranked #4 Most Influential Person in Numerous Awards for Transaction Banker (2016) and ranked #2 Overall all of FinTech in Institution Investors Excellence including by The Information “FinTech Finance 35” “Deal of the Decade” 2 INSURANCE TECHNOLOGY TRENDS Table of Contents I. Executive Summary ............................................................................................... 5 Click title to skip to section II. Industry Overview and the Rise of InsurTech .................................................... 13 III. Key Selected Insurance Technology Trends ...................................................... 23 Insurance Distribution.......... 24 Sales, Marketing and Engagement...... 42 Data and Analytics................ 46 Insurance Administration..................... 55 IV. Industry Landscape .............................................................................................. 58 V. Financing Activity ................................................................................................. 62 VI. Selected Company Profiles ..…………………………………………………........... 82 VII. Selected Insurance & Related Public Company Comparables ........................ 139 VIII. Selected Transaction Profiles .………………………....…………………….…...... 149 IX. Upcoming Industry Conferences ........................................................................ 230 X. Overview of FT Partners ..…………………………....…………………….....……... 233 3 Highly Confidential and proprietary information. Unauthorized distribution without prior consent from Financial Technology Partners LP or FTP Securities LLC (together “FT Partners”) is strictly prohibited. This communication should not be regarded as an offer to sell or as a solicitation of an offer to buy any financial product or service, nor is it an official confirmation of any transaction or representative of an official position or statement of Financial Technology Partners LP, FTP Securities LLC or any other related entity. FTP Securities LLC is a FINRA registered broker-dealer. © 2016 Cover photo credit: Adobe Stock / stockchairatgfx INSURANCE TECHNOLOGY TRENDS Table of Contents – Selected Company and Transaction Profiles Disruptors VI. Selected Company Profiles Click logo to view profile Established Tech-Enabled Companies VI. Selected Company Profiles M&A and Financing Transactions VIII. Selected Transaction Profiles Raises $70 mm Raises $160 mm Sells to Vista Raises $80 mm Raises $400 mm Raises $50 mm Sells to All Web Leads Raises $31 mm Sells to WEX Raises $33 mm Sells to Vista Raises $70 mm Sells to Thoma Bravo Raises $500 mm Sells to Moelis Sells to Aurora 4 I. Executive Summary EXECUTIVE SUMMARY Overview of the Opportunity Insurance is widely • Unlike many other areas of financial services, the insurance industry to-date has not viewed as the next been substantially disrupted by new technology and game-changing business models. great opportunity However, the industry now appears to be at a key inflection point as many different for players in the constituents in the FinTech ecosystem have their sights squarely set on insurance as FinTech ecosystem the next great opportunity. While the pace of innovation is • To this end, FT Partners is seeing a proliferation of Insurance Tech startups targeting rapidly accelerating, all areas of the multi-trillion dollar global industry. Some innovators are targeting the insurance is still a biggest opportunity by creating entirely new insurance carriers, some are creating new very complex and digital tools aimed at helping consumers better understand and become more involved highly regulated with their insurance policies, while still others are looking to enhance and digitize the industry with operations of the existing insurance ecosystem. outdated, but entrenched • New technologies are poised to shake up the industry like never before. For example, processes the recently developed concepts of the “connected home,” “connected car” and even the “connected self” (or, collectively, the Internet of Things) all have huge implications across the insurance value chain. • While the pace of innovation in insurance is accelerating rapidly, this is still a complex, highly regulated industry with outdated, but entrenched processes. The industry won’t change overnight, and the incumbents certainly do not have their “heads in the sand”. Many traditional carriers are embracing the pending changes by starting ventures arms, partnering with startups and generally staying close to the potential opportunities and threats that innovation will bring in the coming years. 6 EXECUTIVE SUMMARY Highlights of the Report In this report, we … . Provide a high-level overview of the insurance industry and highlight the rise of “InsurTech” in the media . Discuss 4 selected key trends driving innovation in the Insurance Technology space Insurance Distribution: Sales, Marketing and Engagement: Improving Insurance Delivery Across All Providing Carriers & Brokers Better Online Channels Marketing & Customer Relationship Tools Data and Analytics: Insurance Administration: Leveraging Tools to Gain Insight and Modernizing Legacy Systems & Developing Improve Business Operations Self-Service Tools . Examine the responses of incumbents to date, including the innovations, partnerships, and acquisitions being made to stay ahead of the game . Provide a broad landscape of established Insurance Technology providers as well as other emerging and innovative companies . Profile 54 key companies and 16 financing and M&A transactions in the Insurance Technology space . Include a comprehensive list of private equity financing transactions in the space 7 FT PARTNERS – FOCUSED EXCLUSIVELY ON FINTECH Selected FT Partners’ Insurance Technology and Benefits Experience 8 FT PARTNERS – FOCUSED EXCLUSIVELY ON FINTECH Selected FT Partners’ Insurance Technology and Benefits Experience • Largest U.S. provider of • Leading provider of integrated • Insureon is the leading SaaS-based software and SaaS technologies and insurance online marketplace services to the property services for health insurance for small and micro businesses contents insurance premium billing, payment and • Serves retail clients directly and marketplace workflow management also supports banks, • This combination will allow • Benaissance will be brokerages and insurance Solera, a global technology integrated with WEX’s existing companies through a powerful leader in intelligent data and Evolution1 platform, creating wholesale offering software systems for the an opportunity for potential • Coverage provided for vehicle and home, to leverage synergies as the businesses 175,000+ small businesses Enservio's proprietary already share a number of database and grow its Digital mutual partners and Home platform customers 9 FT PARTNERS – FOCUSED EXCLUSIVELY ON FINTECH Selected FT Partners’ Insurance Technology and Benefits Experience • Leading technology-enabled • Market-leading provider of • Leading provider of SaaS software and technology- global commercial specialty software and technology- insurance distributor placing enabled sales automation enabled content solutions platforms, with its core over $10bn in premiums to the insurance brokerage annually Foresight illustration product industry and Firelight e-application • Business divisions include • Offers marketing • The transaction brokerage, underwriting, communications, data demonstrates the increasing group benefits and analytics, agency value of technological sales- international management and employer enablement within the resource portal solutions • One of the largest insurance insurance industry – and the brokerage transactions of continued private equity 2012 interest in the space 10 FT PARTNERS – FOCUSED EXCLUSIVELY ON FINTECH Selected FT Partners’ Insurance Technology and Benefits Experience • Largest independent warranty • Provider of finance and provider for consumer insurance (“F&I”) solutions to electronics and major the automobile industry appliances • Blue chip client base • Serves customers directly including: through its website and − Five of the world’s leading through a large network of auto OEMs online and in-store retailers − Two of the world’s largest • Largest venture capital motorcycle manufacturers transaction of 2012 (1) − The nation’s largest new and used vehicle retailers 11 (1) PricewaterhouseCoopers, National Venture Capital Association and Thomson Reuters. FT PARTNERS – FOCUSED EXCLUSIVELY ON FINTECH Selected FT Partners’ Insurance Technology and Benefits