Insurance Technology Sector Summary Q2 2018 GCA INSURANCE TECHNOLOGY OVERVIEW Strong sector and product expertise across InsurTech
REPRESENTATIVE FOCUS AREAS FINTECH TEAM
DISTRIBUTION & Companies that focus on customer engagement, e.g., customer acquisition, sales and SEAN MINNIHAN marketing, mobile solutions and other direct-to-consumer insurance channels, or that CUSTOMER ENGAGEMENT offer solutions to improve distribution or facilitate contact with the end consumer. Managing Director Head of FinTech INNOVATIVE PRODUCTS, Companies that improve existing methodologies for pricing or underwriting risk, or [email protected] actual insurance companies that bring technology to traditionally low-tech areas by PRICING & UNDERWRITING using newer or superior core systems and/or online/mobile offerings. 212.999.7077
POLICY ADMINISTRATION, Insurance is behind the curve in enterprise-level core technology, and InsurTech companies help modernize these operating systems - in particular policy, claims, and CLAIMS & BACK OFFICE PAUL DINARDO billing software systems. Managing Director Head of Software Companies that provide analytic capabilities to insurance companies to help them DATA & ANALYTICS operate more efficiently and/or make better underwriting decisions. [email protected] 212.999.7097
RECENT INSURTECH TRANSACTIONS CHRIS GOUGH Managing Director Real Estate & Mortgage Tech [email protected] Sold Sold 415.318.3658 Sold majority stake to Tender Offer for Strategic Investment
To To Asahi Fire & Marine KEGAN GREENE Insurance Co. Director
We Advised Risk International We Advised BlackFin We Advised Asahi (close pending) We Advised RGI Shareholders We Advised ControlExpert InsurTech [email protected] 415.318.3686
Acquired by Preferred Stock Investment Acquired by Acquired by Acquisition of ROB FREIMAN from Director Payments [email protected] 212.999.7075 We Advised AWL Financial Advisor We Advised Finanzen.de We Advised INS Web We Advised INS Web
2 EXECUTIVE SUMMARY Q2 2018 InsurTech wrap-up
• InsurTech continues to be a highly active category, with ~$621MM in financing volume and ~$500MM in M&A volume during Q2 ‘18 - 43 financings in Q2 ‘18 is ~14% less than the same period in ’17, but 100 financings YTD is on pace with 200+ total financings in ’17 - 15 M&A transactions in Q2 ‘18 is ~40% less than the same period in ’17, and 36 deals YTD is behind pace with 80+ total deals in ‘17 • Increase in larger financings as category leaders begin to differentiate themselves and investors look to back established players - Financing activity across multiple sub-verticals, led by SoftBank’s investment in Policybazaar, Warburg Pincus’ investment in BitSight and Everquote’s IPO • Private equity M&A continues to be active across InsurTech categories - Examples include BV’s acquisition of Risk International (GCA represented Risk International), Stone Point’s acquisition of Mitchell and AKKR’s acquisition of ITC • As the InsurTech landscape is evolving rapidly, insurers prefer to build nimble partnerships and monitor what will happen next vs. committing to technologies via M&A - Corporate venture deals abound, including Liberty Mutual’s investment in REIN and LeaseLock, XL Innovate’s investment in Cape Analytics and Zurich’s investment in Digital Insurance Group • Non-insurers like Softbank, Google Ventures, Salesforce and Amazon continue to invest in InsurTech - Amazon recently invested in Acko, a Mumbai-based start-up focused on auto and bike insurance - Google Ventures currently has 8 investments across InsurTech, including Collective Health, Gusto, Clover, Oscar, Lemonade and others
Select Q2 Active Investors Select Q2 Active Buyers
Notes: 3 Source: CB Insights. INSURANCE VALUE CHAIN: INNOVATION ACROSS THE Distribution & Innovative Policy Admin, Data & Customer Products, Pricing Claims & Analytics INSURANCE VALUE CHAIN Engagement & Underwriting Back Office
`Online Distribution & Comparison `Sales, Marketing & Engagement Customer Origination
Mobile
Peer-to-Peer (P2P) Innovative & Specialty Insurance Health Insurance Carrier Affiliated ` ` ` `
Benefits Administration & Payroll Policy Management Tools & Software Claims Management Tools & Software ` ` `
Insurance Data & Analytics IoT & Telematics: Auto IoT & Telematics: Home ` ` `
IoT & Telematics: Health `
DISCLAIMER: This is a representative list and may not include all relevant companies. If your company is not on the list and would like to be added for future 4 publications, kindly shoot us a note at [email protected] and we would be happy to consider. INSURTECH DEAL DASHBOARD – FINANCING ACTIVITY
Quarterly Financing Activity ($MM)(1) Select Q2 2018 Financing Transactions ($MM) LTM financing volume: Post- Segment / Ann. Selected Amt. $3.6Bn across 211 Deals Company Money Value Date Investor(s) Invested Valuation Chain
6/28 Public $84.4 $464
62 6/28 $60.0 $750 57
50 49 6/28 $7.3 NA 45 43 42 6/25 $200.0 $1,000 38 $1,581
6/21 $17.0 $77
6/12 $17.6 NA $942 $899 $731 $621 6/5 $30.0 NA $534 $472 $339 5/28 $12.0 NA
4/30 $10.0 $30 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Average Deal Size
$24.8 $11.2 $7.5 $14.6 $8.6 $32.3 $15.8 $14.4 4/10 $10.0 $125
Insurance Segment Insurance Value Chain Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. 5 Market data as of 6/30/18. P&C Life Health Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics (1) Includes private company equity financings, and Everquote IPO in Q2 2018. Engagement Underwriting & Back Office SELECTED RECENT INSURTECH FINANCINGS
Founded Headquarters Total Funds Raised ($MM) 2016 Berlin $40 Aims to redesign and extend the insurance value chain, offering scalable protection at the point of need with an AI risk Raised $30MM in guardian and simple, transparent and personalized insurance coverage. Series A funding on
6/5/2018
Selected Investors
Founded Headquarters Total Funds Raised ($MM) 2016 Paris $42
Provides software that enables employees to more easily personalize their employer health coverage. Raised $28MM in Series A funding on
4/10/2018
Selected Investors
Founded Headquarters Total Funds Raised ($MM) 2014 Marina del Rey $11
Provides an online platform designed to offer rent payment insurance programs. Raised $10MM in Series A funding on
4/29/2018
Selected Investors
Notes: Source: PitchBook. 6 INSURTECH HISTORICAL FINANCING ACTIVITY Financing activity is on par with ‘17 levels on an annualized basis
Selected Major InsurTech Financings Annualized
= Number of Transactions 206 200 = Financing Volume ($USD MM) 163 127
100
88
55 $3,185 42 $2,773 $2,694
$1,520
$603 $702 $351
2012 2013 2014 2015 2016 2017 YTD 2018
$100MM $52MM $60MM $500MM $103MM $130MM $110MM
$50MM $65MM $931MM $400MM $160MM $165MM
$110MM* $38MM $160MM $120MM $200MM
$38MM $50MM
Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. 7 Market data as of 6/30/18. *Oscar raised two rounds in 2014 – one worth $30MM and the other worth $80MM. INSURTECH LEADERS IN PRIVATE FUNDING Top 10 Company Headquarters Founded Amt. Raised ($MM) Company Description
New York, NY 2012 $904 Provider of an online health insurance network
Provider of cloud-based SaaS for HR and benefits San Francisco, CA 2012 $598 management
Operator of PPO using data analysis and preventive San Francisco, CA 2012 $425 care to improve health insurance
Provider of an online life insurance and general Haryana, India 2008 $355 insurance comparison portal
San Francisco, CA 2013 $259 Provider of cloud-based self-insurance platform
Provider of a web-based service platform to Zurich, Switzerland 2014 $254 handle insurance contracts
Partners with health systems and care partners to Minneapolis, MN 2015 $242 provide health plans
London, UK 2016 $230 Tech-based provider of life insurance in the UK
Provider of a personalized health and benefits Plymouth Meeting, PA 2007 $220 platform
San Francisco, CA 2011 $207 Provider of pay-per-mile car insurance
Notes: Source: Pitchbook. Round of financing in Q2 2018 8 INSURTECH COMPANY PROFILE Oscar Health Insurance
Founded Headquarters Total Funds Raised ($MM) 2012 NYC $904 Oscar is a health insurance company that employs technology and data to humanize health care. $3,200
Cumulative Funds Raised ($MM) $2,700 $904 Post Money Valuation ($MM) $1,750 $739
$1,500 $339
$800 $306
$340 $162
$121 $340m$82
$52
Jul-13 Apr-14 Jan-15 Oct-15 Jul-16 Apr-17 Jan-18
Seed - II: $30 Series B: $145 Series D: $165 Series C: $400 Seed: $52 Series A: $80 Series B - II: $33 Notes: 9 Source: PitchBook. SELECTED ACTIVE INSURTECH INVESTORS
Most Active Insurance Technology Investors
Accelerators / Seed
Venture Capital / Private Equity
Corporate Investors
Ventures
Alternative Investors
Notes: 10 Source: CB Insights, Pitchbook. MOST ACTIVE INSURTECH INVESTORS – CORPORATE VENTURE CAPITAL
Company Headquarters Number of Investments Investments Paris, France 8 Springfield, MA 8 Mountain View, CA 8 Menlo Park, CA 7 Munich, Germany 6
Madison, WI 6 San Francisco, CA 6
Munich, Germany 5
San Francisco, CA 5 Columbus, OH 5
New York, NY 4
Notes: 11 Source: CapIq, Pitchbook. INSURTECH DEAL DASHBOARD – M&A ACTIVITY
Quarterly M&A Activity ($MM) Select Q2 2018 M&A Transactions ($MM) LTM M&A volume: Segment / Value $4.1Bn across 75 deals Buyer Target Transaction Value Chain
NA
NA 29
25 NA 24 20 21 19 15 NA 12 $2,967
NA
Insurwave NA $1,705 $1,381 NA
$784 NA $426 $500 $235 $225 NA Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Average Deal Size
$19.6 $58.8 $32.7 $55.3 $21.3 $156.2 $10.7 $33.3 NA
Insurance Segment Insurance Value Chain Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. 12 Market data as of 6/30/18. P&C Life Health Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics (1) Q4-17 includes Assurant’s $2.5bn acquisition of Warranty Group. Engagement Underwriting & Back Office INSURTECH HISTORICAL M&A ACTIVITY M&A deal activity is behind ‘17 levels (and closer to ‘16 levels) on an annualized basis
Selected Major InsurTech M&A Transactions
= Number of Transactions = M&A Volume ($USD MM)
88 85 Annualized
72 71 67
58 $18,547
48 36 $7,444 $5,266 $5,052 $5,559 $2,851 $725
2012 2013 2014 2015 2016 2017 YTD 2018 Acquirer logo on top
$1.3Bn $1.8Bn $2.4Bn $8.7Bn $1.4Bn $2.5Bn $414MM
$553MM $1.1Bn $400MM $760MM $174MM $919MM $155MM
$160MM $490MM Undisclosed
Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. 13 Market data as of 6/30/18. $322MM Undisclosed INSURTECH PUBLIC COMPANY VALUATION Selected InsurTech subsectors and key operating stats LTM Share Price Performance
65% 55% 43% 45% 40% 35% 35% 30% 25% 15% 16% 5% 2% (5%) (15%) (25%) Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18
Benefits Admin. / Payroll Brokerage Data & Analytics Insurance Software IT & BPO Services Online Distribution Public InsurTech Ecosystem
Benefits Admin. / Payroll Brokerage Data & Analytics Insurance Software IT & BPO Services Online Distribution
30% 2% 16% 35% 43% 40%
LTM Share Price Performance Notes: Source: CapIq. 14 Revenue growth and EBITDA margins shown are median values for comp group. Market data as of 6/30/18. INSURTECH PUBLIC COMPANY VALUATION Selected InsurTech subsectors and key operating stats Enterprise Value / 2018E Revenue Enterprise Value / 2018E EBITDA
6.0x 35.0x 30.8x 5.0x 30.0x 5.0x 4.5x 25.0x 4.0x 3.1x 20.0x 17.2x 3.0x 2.6x 14.8x 2.3x 2.1x 15.0x 13.1x 12.9x 12.6x 2.0x 10.0x
1.0x 5.0x
0.0x 0.0x Data & Analytics Benefits Brokerage Online Insurance IT & BPO Insurance Benefits Data & Brokerage Online IT & BPO Admin./Payroll Distribution Software Services Software Admin./Payroll Analytics Distribution Services Public InsurTech Ecosystem
Benefits Admin. / Payroll Brokerage Data & Analytics Insurance Software IT & BPO Services Online Distribution
4.0x / 17.1x 3.0x / 12.0x 4.7x / 13.5x 2.0x / 22.3x 2.1x / 11.3x 2.3x / 12.1x
2019E Rev. / 2019E EBITDA Multiple Notes: Source: CapIq. 15 Revenue growth and EBITDA margins shown are median values for comp group. Market data as of 6/30/18. SELECTED PUBLIC COMPANY DETAIL ($MM, except per share data) Stock Operating Metrics Trading Metrics Price Equity Enterprise Revenue Growth EBITDA Margin EV / Revenue EV / EBITDA Company 6/30/18 Value Value 18E/17A 19E/18E 18E 18E 19E 18E 19E Benefits Administration/Payroll Automatic Data Processing, Inc. $134.14 $59,092 $58,800 8% 7% 22% 4.3x 4.0x 19.3x 17.1x Paychex, Inc. $68.35 $24,538 $24,113 7% 7% 41% 7.0x 6.5x 17.1x 15.6x HealthEquity, Inc. $75.10 $4,660 $4,390 24% 23% 39% 15.5x 12.7x 40.1x 31.3x TriNet Group, Inc. $55.94 $3,932 $4,015 6% 12% 36% 4.7x 4.2x 13.0x 11.6x Insperity, Inc. $95.25 $4,001 $3,749 14% 10% 6% 1.0x 0.9x 17.2x 15.2x Paylocity Holding Corporation $58.86 $3,099 $2,970 25% 22% 21% 7.9x 6.5x 37.1x 29.0x WageWorks, Inc. $50.00 $1,982 $1,334 6% 6% 32% 2.6x 2.5x 8.2x 7.5x Benefitfocus, Inc. $33.60 $1,067 $1,135 (1%) 12% 3% 4.5x 4.0x NM 56.8x Castlight Health, Inc. $4.25 $578 $509 17% 19% (7%) 3.3x 2.8x NM 38.6x
Median 8% 12% 22% 4.5x 4.0x 17.2x 17.1x
Brokerage Marsh & McLennan Companies, Inc. $81.97 $41,590 $46,749 8% 5% 24% 3.1x 3.0x 13.0x 11.9x Aon plc $137.17 $33,540 $39,183 9% 5% 26% 3.6x 3.4x 13.7x 12.7x Willis Towers Watson Public Limited Company $151.60 $19,987 $23,625 5% 4% 25% 2.8x 2.7x 11.1x 10.5x Arthur J. Gallagher & Co. $65.28 $11,899 $14,474 6% 8% 17% 2.3x 2.1x 13.3x 12.0x Brown & Brown, Inc. $27.73 $7,660 $8,053 6% 6% 31% 4.1x 3.9x 13.1x 12.3x Jardine Lloyd Thompson Group plc $16.89 $3,572 $4,100 5% 7% 21% 2.1x 2.0x 10.1x 8.7x Goosehead Insurance, Inc $24.96 $338 $380 43% 44% 27% 6.3x 4.4x 23.3x 15.8x
Median 6% 6% 25% 3.1x 3.0x 13.1x 12.0x
Data & Analytics RELX PLC $21.41 $42,231 $48,685 (2%) 4% 35% 4.9x 4.7x 14.1x 13.4x Experian plc $24.73 $22,397 $25,872 13% 4% 35% 5.3x 5.1x 15.4x 14.9x Verisk Analytics, Inc. $107.64 $17,789 $20,417 12% 7% 47% 8.6x 8.0x 18.1x 16.7x Equifax Inc. $125.11 $15,049 $17,428 5% 6% 34% 5.0x 4.7x 14.8x 13.5x TransUnion $71.64 $13,182 $15,426 15% 9% 39% 7.0x 6.4x 18.0x 16.2x Fair Isaac Corporation $193.32 $5,769 $6,365 11% 8% 25% 6.1x 5.6x 24.1x 20.2x CoreLogic, Inc. $51.90 $4,237 $5,823 1% 2% 26% 3.1x 3.1x 11.9x 11.1x The Dun & Bradstreet Corporation $122.65 $4,548 $5,689 1% 2% 30% 3.2x 3.1x 10.8x 10.4x Acxiom Corporation $29.95 $2,309 $2,396 5% 7% 20% 2.5x 2.4x 12.9x 12.3x
Median 5% 6% 34% 5.0x 4.7x 14.8x 13.5x
Notes: Source: CapIq. Pitchbook. 16 Multiples based on CapIq Consensus Estimates. Multiples <0 and >100 considered NM. SELECTED PUBLIC COMPANY DETAIL ($MM, except per share data) Stock Operating Metrics Trading Metrics Price Equity Enterprise Revenue Growth EBITDA Margin EV / Revenue EV / EBITDA Company 6/30/18 Value Value 18E/17A 19E/18E 18E 18E 19E 18E 19E Insurance Software Guidewire Software, Inc. $88.78 $7,126 $6,434 27% 20% 22% 9.9x 8.2x 44.7x 37.6x Ebix, Inc. $76.25 $2,399 $2,702 27% 7% 37% 6.0x 5.6x 16.0x 14.4x Sapiens International Corporation N.V. $9.77 $486 $503 5% 6% 14% 1.8x 1.7x 12.4x 10.7x Majesco $6.15 $225 $230 (7%) 14% 4% 2.1x 1.8x 48.2x 23.0x Symbility Solutions Inc. $0.38 $92 $83 10% 13% 7% 2.3x 2.0x 30.8x 22.3x
Median 10% 13% 14% 2.3x 2.0x 30.8x 22.3x
IT & BPO Services Accenture plc $163.59 $104,820 $100,917 13% 7% 17% 2.5x 2.4x 14.7x 13.7x Tata Consultancy Services Limited $26.98 $103,304 $97,781 4% 12% 27% 5.0x 4.4x 18.7x 17.0x Cognizant Technology Solutions Corporation $78.99 $46,280 $42,223 10% 9% 21% 2.6x 2.4x 12.2x 10.7x Infosys Limited $19.09 $41,486 $38,071 2% 9% 26% 3.4x 3.2x 13.0x 12.0x DXC Technology Company $80.61 $22,889 $28,620 12% (2%) 22% 1.3x 1.3x 5.9x 5.7x CGI Group Inc. $63.34 $17,652 $18,866 1% 3% 18% 2.1x 2.1x 11.7x 11.2x HCL Technologies Limited $13.53 $18,833 $17,401 3% 10% 23% 2.1x 1.9x 9.1x 8.5x Wipro Limited $3.82 $17,181 $14,794 (4%) 6% 19% 1.8x 1.7x 9.4x 8.8x Genpact Limited $28.93 $5,508 $6,392 9% 8% 17% 2.1x 2.0x 12.9x 11.8x Capita plc $2.11 $3,491 $5,143 (7%) (6%) 11% 1.0x 1.0x 9.1x 9.2x Syntel, Inc. $32.09 $2,662 $2,862 2% 2% 25% 3.0x 3.0x 12.0x 11.9x Mphasis Limited $15.85 $3,063 $2,789 6% 14% 17% 2.7x 2.3x 15.6x 13.5x WNS (Holdings) Limited $52.18 $2,632 $2,500 17% 11% 22% 3.1x 2.8x 14.3x 12.2x Mindtree Limited $14.41 $2,364 $2,249 9% 14% 15% 2.5x 2.2x 16.4x 13.6x Hexaware Technologies Limited $6.69 $1,986 $1,895 7% 14% 17% 2.9x 2.5x 17.2x 15.0x ExlService Holdings, Inc. $56.61 $1,947 $1,776 12% 9% 18% 2.1x 1.9x 11.8x 10.6x Virtusa Corporation $48.68 $1,445 $1,504 25% 14% 9% 1.2x 1.1x 14.5x 11.3x CorVel Corporation $54.00 $1,023 $967 8% NA 12% 1.6x NM 13.6x NM Crawford & Company $8.65 $476 $679 (1%) 3% 11% 0.6x 0.6x 5.3x 4.9x Firstsource Solutions Limited $1.03 $708 $782 (0%) 11% 13% 1.4x 1.3x 11.3x 10.2x
Median 6% 9% 17% 2.1x 2.1x 12.6x 11.3x
Online Distribution Moneysupermarket.com Group PLC $4.16 $2,228 $2,180 1% 6% 37% 4.8x 4.5x 12.9x 12.1x GoCompare.com Group plc $1.73 $723 $776 13% 6% 27% 3.4x 3.2x 12.5x 11.3x QuinStreet, Inc. $12.70 $599 $552 33% 16% 9% 1.4x 1.2x 16.1x 12.4x EverQuote, Inc. $18.12 $449 $453 5% 10% (3%) 3.4x 3.1x NM NM eHealth, Inc. $22.10 $420 $385 31% 13% 5% 1.7x 1.5x 36.7x 15.3x iSelect Limited $0.60 $129 $103 (0%) 5% 8% 0.6x 0.5x 7.3x 5.6x
Notes: Median 9% 8% 8% 2.6x 2.3x 12.9x 12.1x Source: CapIq. Pitchbook. 17 Multiples based on CapIq Consensus Estimates. Multiples <0 and >100 considered NM. GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK Global investment bank that provides strategic M&A and capital markets advisory services to growth companies and market leaders
MANCHESTER OSAKA FRANKFURT NAGOYA NEW YORK MUNICH TOKYO
SHANGHAI LONDON NEW DELHI MILAN SAN FRANCISCO TEL AVIV ZURICH TAIPEI
MUMBAI HO CHI MINH CITY
SINGAPORE
Geographically Globally integrated Strong cross-border balanced, Strong in key platform with 18 capabilities and synergistic and growth sectors 400+ 350+ deals closed offices across deal flow: ~35% of complementary such as Technology professionals in the last 3 years America, Asia and all transactions are sector focus areas and Industrials Europe cross-border across the firm
18 GCA operates as GCA in America and Asia, and GCA Altium in Europe. GCA OVERVIEW Selected FinTech experience
Sold Sold majority stake to Acquired Acquired by Acquired by Tender Offer for Acquired by
To Asahi Fire & Marine Insurance Co. We Advised Risk International We Advised Principal We Advised CHX Fairness Opinion to Clearent We Advised BlackFin We Advised Asahi We Advised WorkMarket Insurance Technology Investment Technology Liquidity Venues Payments Insurance Technology Insurance Technology Financial SaaS
Sold Sale of Financing from Majority sale to Growth Investment Strategic Investment Acquired by
to To
We Advised RGI Shareholders We Advised Radius We Advised Skyslope Financial Advisor Financial Advisor We Advised ControlExpert We Advised Edo Insurance Technology Payments Real Estate Tech Banking & Lending Tech Payments Insurance Technology Payments
Growth Investment Growth Investment Acquired by Acquisition of Acquisition of Acquired by Acquired by from
Financial Advisor We Advised Vindicia We Advised Commissions Inc We Advised Capsilon We Advised TSYS We Advised Blucora We Advised AWL Payments Payments Real Estate Tech Real Estate Tech Payments Investment Technology Insurance Technology
Growth Investment Preferred Stock Investment Acquired by Acquisition of Acquired by Acquired by Acquisition of For Blockchain Technology from
Financial Advisor Financial Advisor We Advised GP Net We Advised TSYS We Advised Finanzen.de We Advised INS Web We Advised INS Web Information Services Insurance Technology Payments Payments Insurance Technology Insurance Technology Insurance Technology Notes: 19 The above transactions represent a compilation of deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on. CASE STUDY: RISK INTERNATIONAL SALE OF MAJORITY STAKE TO BV
GCA acted as exclusive financial advisor to Risk International
Background GCA Value-Add
• An independent, outsourced risk management, • GCA acted as exclusive financial advisor to RIH in benefits advisory, actuarial consulting, and claims connection with the transaction services provider, Risk International (RIH) has helped • Provided execution support to RIH throughout the Sold majority stake to clients save or reduce their cost of risk by more than process, including: $1 billion collectively since opening its doors in 1986. Risk International is headquartered in Fairlawn, OH, › Identifying and engaging potential investors with offices in Charleston, SC and Charlotte, NC › Preparing marketing materials • BV Investment Partners is one of the oldest and most › Coordinating due diligence experienced sector-focused private equity firms in North America. Since its founding in 1983, the firm › Evaluating a variety of transaction structures GCA Advised Risk International has invested over $3 billion in more than 92 › Negotiating valuation and other key terms companies in IT and business services › Advising on complex definitive agreement matters Transaction Rationale / Details › Support through documentation and signing Insurance Segment • RIH will leverage BV’s strategic expertise to scale the business, while also exploring its network of other private equity firms and portcos who may have use for outsourced risk management and benefits services P&C Life Health • RIH will deploy newly available capital to invest in a structured sales & marketing effort Insurance Value Chain • The transaction creates a platform for bolt-on acquisitions of firms in related fields
Data & Analytics
Policy Admin, Claims & Back Office
20 CASE STUDY: SALE OF FINANZEN GROUP TO ELI GLOBAL
GCA advised the shareholders of Finanzen Group on its sale to Eli Global
Background GCA Value-Add
• Headquartered in Berlin, Germany, Finanzen Group • GCA acted as exclusive financial adviser to BlackFin Sold (“Finanzen” or the “Company”) connects lead Capital Partners and the founders on the sale of generators, such as online price comparison sites, Finanzen to Eli Global with lead buyers, such as independent financial • GCA advised on all aspects of the transaction, advisors and insurance agents coordinating multiple highly interested strategic and To • Finanzen’s online marketplace allows leads to be financial investors and maintaining a competitive traded in real-time, bridging the gap between online dynamic throughout the process insurance consumers and the offline sales • Eli Global evolved as the most attractive partner due organizations of European carriers and brokers GCA Advised BlackFin and the to a global footprint in the insurance sector • Additionally, the Company acts as an online broker founders • Eli Global is a federation of over 100 independent for certain insurance products technology, insurance, financial services and healthcare portfolio companies across 18 countries Transaction Rationale / Details Insurance Segment • Finanzen and its majority shareholder, BlackFin Capital Partners, sought a strategic partner with an international footprint and relevant InsurTech experience to accelerate the Company’s growth P&C • Company shareholders aimed to realize a valuation reflecting Finanzen‘s strong growth, significant market potential Insurance Value Chain and unique competitive positioning
Distribution & Customer Engagement
Products, Pricing & Underwriting
21 CASE STUDY: RAKUTEN MAKES TENDER OFFER FOR ASAHI FIRE & MARINE INSURANCE
GCA acted as exclusive financial advisor to Asahi
Background GCA Value-Add
• Founded in 1951, Asahi is a nonlife insurance • GCA was retained as Asahi’s sell-side advisor in the company operating in Japan. Asahi Fire also operates execution of the transaction Tender Offer for a nonlife insurance agency business through its › Positioned Asahi as the right opportunity with wholly owned subsidiary, Mirai no Hoken Co which Rakuten could deepen its ecosystem • Founded in Tokyo in 1997 as an online marketplace, › Managed a tight transaction timeline while Asahi Fire & Marine Rakuten has expanded its unique ecosystem to offer maintaining confidentiality throughout the process Insurance Co. services in e-commerce, fintech, digital content, and › Supported Asahi throughout deal structuring and communications to more than 1 billion members ~$412 MM negotiations around the world GCA Advised Asahi (close pending)
Transaction Rationale Insurance Segment • Asahi can build on its solid customer base by incorporating the members of Rakuten and its affiliated stores as new contractors P&C • Asahi can efficiently and effectively sell insurance products through multiple channels by leveraging Rakuten’s Insurance Value Chain internet sales capabilities
Distribution & Customer • The acquisition offers tie-ups with companies of the Rakuten Group and enables innovations in Asahi’s traditional Engagement insurance products with its internet-based technology Products, Pricing & • Since Asahi has many injury insurance practitioners familiar with the target audience, both companies realize Underwriting synergy through exchange between its human resources and insurance-related businesses, providing a unique and attractive nonlife insurance product lineup
22 CASE STUDY: SALE OF RGI TO CORSAIR CAPITAL
GCA acted as exclusive financial advisor to the shareholders of RGI
Background GCA Value-Add
• RGI is the European market leader in the insurance • GCA was selected as exclusive sell-side financial Sold software vertical, with 200+ installations serving 100+ advisor due to our extensive experience in advising clients growing and profitable software companies, our expertise within the insurance space, and our broad • RGI offers a state-of-the-art policy administration network of contacts among global tech-focused software suite with multi-country capabilities, private equity firms To suitable for all-tier insurers across verticals
GCA Advised RGI Shareholders
Transaction Details Insurance Segment • Shareholders decided to sell RGI after having successfully completed the acquisition of France-based Kapia Solutions (September 2016), which provided RGI an integrated platform to cover life insurance clients P&C Life Health • RGI shareholders retained GCA to lead a structured sale process Insurance Value Chain • GCA ran a highly competitive process, approaching a targeted group of tech-focused global financial investors and a limited number of strategic buyers • GCA supported RGI throughout all transaction phases, setting up all marketing documentation, coordinating Policy Admin, Data & business plan and VDD reports preparation, managing an in-depth due diligence process, helping with legal / Claims & Back Office Analytics financing documents, and handling SPA and management incentive plan negotiations • Corsair Capital emerged as the fastest and most committed bidder
23 CASE STUDY: SALE OF CONTROLEXPERT TO GENERAL ATLANTIC
GCA acted as exclusive financial advisor to the shareholders of ControlExpert
Background GCA Value-Add
• ControlExpert is a disruptive technology service • GCA was retained as sell-side advisor to provide provider to the auto insurance industry and Europe’s support in the preparation and execution of the largest InsurTech company transaction to the Company and its shareholders: Strategic Investment • The Company serves a broad blue-chip customer › Channeled strong inbound interest from base of more than 100 enterprise accounts, including numerous strategic buyers and financial sponsors ~90% of all German auto insurances, as well as major › Managed a tight transaction timeline while leasing/fleet management companies and maintaining confidentiality throughout the process automotive OEMs › Coordinated due diligence work streams • ControlExpert’s cutting-edge technology allows more GCA Advised ControlExpert efficient organization of a traditionally very lengthy, costly and prone-to-fraud claims handling process
Transaction Details Insurance Segment • ControlExpert sought a strategic partner with an international footprint and relevant industry experience to accelerate its future growth in existing and new markets P&C • The shareholders were aiming to realize a valuation which reflects ControlExpert‘s strong growth, significant market Insurance Value Chain potential and competitive positioning • General Atlantic emerged as the preferred potential partner and was able to move swiftly during the due diligence phase Policy Admin, Data & • The transaction was signed in May 2017 and closed June 2017 Claims & Back Office Analytics
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