Insurance Technology Sector Summary Q4 2019 1 EXECUTIVE SUMMARY Q4 2019 InsurTech wrap-up InsurTech continues to be a highly active category, with ~$2.0Bn in financing volume and ~$1.1Bn in M&A volume during Q4 2019 » Financings in Q4 2019 (62) were roughly flat with the same period in 2018, but 2019 total financing volume was up ~70% YoY » M&A activity was somewhat tempered with 23 transactions during Q4 2019 as compared to 33 transactions during the same period in 2018 Large financing rounds took place in Q4 as renowned investors looked to back established players in the InsurTech space » The largest financing rounds of Q4 include Bright Health’s $635M raise, Next Insurance’s $250M raise, and Wefox’s $235M raise » Corporate VCs’ investments in the InsurTech space continued in Q4 as Munich Re invested in Next Insurance and AXA invested in Thimble Q4 M&A activity included some attention-grabbing strategic deals, including iA Financial Group’s acquisition of Innovative Aftermarket Systems, Verisk Analytics’ acquisition of FAST, and MasterCard’s acquisition of RiskRecon Data & analytics companies are trading at 6.2x EV/ ’20E Revenue and at 18.4x EV/ ’20E EBITDA, leading public company valuations Select Q4 Active Investors Select Q4 Active Buyers Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 2 GCA INSURANCE TECHNOLOGY OVERVIEW Strong sector and product expertise across InsurTech REPRESENTATIVE FOCUS AREAS Insurance is behind the curve in enterprise-level core Companies that focus on customer engagement (e.g., customer POLICY ADMIN, CLAIMS & technology, and InsurTech companies help modernize DISTRIBUTION & acquisition, sales and marketing, mobile solutions and other direct- BACK OFFICE these operating systems – in particular, policy, claims, CUSTOMER ENGAGEMENT to-consumer insurance channels) or that offer solutions to improve and billing software systems. distribution or facilitate engagement with the end consumer. Companies that improve existing methodologies for pricing or Companies that provide analytic capabilities to insurance INNOVATIVE PRODUCTS, underwriting risk, or actual insurance companies that bring DATA & ANALYTICS companies to help them operate more efficiently and/or PRICING, UNDERWRITING technology to traditionally low-tech areas by using newer or make better underwriting and claims decisions. superior core systems and/or online/mobile offerings. INSURTECH TEAM Chris Gough John Lambros Sascha Pfeiffer Rushi Bhanderi Managing Director Managing Director Managing Director Vice President [email protected] [email protected] [email protected] [email protected] 415.318.3658 212.999.7083 +49 177.741.5643 212.537.5482 RECENT TRANSACTIONS 3 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 ` Notes: 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 publications, kindly shoot us a note at 4 [email protected] and we would be happy to consider. RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTOR 2019 sets all-time record for InsurTech financing volume Selected Major InsurTech Financings = Number of Transactions 285 = Financing Volume ($MM) 260 248 169 $7,121 117 79 $4,210 $3,475 59 $2,974 $355 $1,851 $883 2013 2014 2015 2016 2017 2018 2019 $52MM $110MM(1) $931MM $400MM $160MM $540MM(2) $635MM $65MM $500MM $160MM $130MM $500MM $500MM $60MM $50MM $103MM $120MM $300MM $350MM $38MM $38MM $200MM $300MM Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. The GCA Deal Database was refreshed in Q1 2020 to incorporate an improved screening methodology. Accordingly, this data may diverge from previous reports. $200MM $235MM 5 1) Oscar raised two rounds in 2014 – one worth $30MM and the other worth $80MM. 2) Oscar raised two rounds in 2018 – one worth $165MM and the other worth $375MM. INSURTECH DEAL DASHBOARD – FINANCING ACTIVITY Q4 2019 saw accelerating InsurTech financing amounts, up ~25% YoY Quarterly Financing Activity ($MM)(1) Select Q4 2019 Financing Transactions ($MM) LTM financing: Post- Segment / Ann. Selected Amt. Company Money Value $7.1Bn across 285 Deals Date Investor(s) Invested Valuation Chain 79 12/18 $45 $600 71 72 72 65 65 12/17 62 $635 $2,240 59 12/11 $235 $1,890 12/09 $120 NA $2,033 $1,938 $1,636 $1,653 11/25 $66 NA $1,497 $1,365 11/20 $45 $210 $750 $460 11/18 $22 NA 10/17 $39 $209 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Average Deal Size 10/7 $250 $1,000 $10.6 $7.1 $21.0 $27.7 $26.9 $20.8 $20.9 $32.8 Insurance Segment Insurance Value Chain $165MM $30MM $375MM $500MM $500MM $300MM $350MM $635MM P&C Life Health Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics Engagement Underwriting & Back Office Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 6 The GCA Deal Database was refreshed in Q1 2020 to incorporate an improved screening methodology. Accordingly, this data may diverge from previous reports. SELECTED RECENT INSURTECH FINANCINGS Founded Headquarters Total Funds Raised ($MM) 2015 Minneapolis $1,080 Developer of a health insurance services platform that partners with health systems and care partners to provide health plans Raised $635MM in and connected healthcare experience to support relationships between consumers and care providers Series D funding on 12/17/2019 Selected Investors Founded Headquarters Total Funds Raised ($MM) 2014 Berlin $274 Developer of a web-based service platform intended to view, adjust, and complete insurance contracts anytime, anywhere in the world Raised $235MM in Series B funding on 12/11/2019 Selected Investors Founded Headquarters Total Funds Raised ($MM) 2015 Palo Alto $386 Operator of an online business insurance platform that offers general and professional liability insurance for small businesses in numerous industries Raised $250MM in Series C funding on 10/07/2019 Selected Investors Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 7 INSURTECH LEADERS IN PRIVATE FUNDING Top 10 Company Headquarters Founded Amt. Raised ($MM)(1) Company Description New York, NY 2012 $1,280 Online health insurance network Health insurance platform partnering with health Minneapolis, MN 2015 $1,080 systems and care partners to provide health plans Operator of PPO using data analysis and preventive Jersey City, NJ 2014 $925 care to improve health insurance Online car insurance platform calculating insurance Columbus, OH 2015 $628 premiums based upon driver behavior San Francisco, CA 2013 $598 Cloud-based human resources platform Cloud-based payroll, benefits, and HR management San Francisco, CA 2011 $521 platform P&C insurance platform designed to offer coverage New York, NY 2015 $480 quickly and affordably Cloud-based self-insurance platform for all health San Francisco, CA 2013 $469 plans Online platform intended to offer various insurance Gurugram, India 2008 $393 products and enable comparison shopping Palo Alto, CA 2015 $386 Online insurance platform that offers general and professional liability insurance for small businesses Round of financing in Q4 2019 Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 8 1) Includes debt and equity financing. SELECTED ACTIVE INSURTECH INVESTORS Investor Type Investor Logos Accelerators / Seed Venture Capital / Private Equity Corporate Investors Alternative Investors Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 9 MOST ACTIVE INSURTECH INVESTORS – CORPORATE VENTURE CAPITAL Company Headquarters Number of Investments Investments (1) Paris, France 19 (2) Munich, Germany 13 Munich, Germany 12 Madison, WI 11 Springfield, MA 9 Paris, France 9 Mountain View, CA 9 Columbus, OH 8 San Francisco, CA 6 New York, NY 6 Shenzhen, China 5 Shuidi Chicago, IL 4 Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. 1) AXA invests through XL Innovate, AXA Venture Partners, and Kamet Ventures. 10 2) Allianz invests through Allianz X, Allianz Life Ventures, and Allianz Startups Accelerator. RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTOR 2019 continues the recent trend in InsurTech M&A volume, though deal count has levelled off Selected Major InsurTech M&A Transactions = Number of Transactions = Financing Volume ($MM) 117 98 100 $18,168 64 52 48 $12,986 $10,415 $11,227 $9,181 31 $8,136 $3,131 2013 2014 2015 2016 2017 2018 2019 $1.8Bn $2.7Bn $7.9Bn $4.5Bn $2.5Bn $6.7Bn $3.5Bn(1) $1.1Bn $2.4Bn $6.0Bn $2.6Bn $919MM $1.5Bn $1.6Bn $910MM $1.4Bn $560MM $525MM $1.5Bn(2) Notes: Source: GCA Deal Database, CB Insights, Pitchbook, S&P Capital IQ as of 12/31/19. The GCA Deal Database was refreshed in Q1 2020 to incorporate an improved screening methodology. $490MM $370MM $1.4Bn Accordingly, this data may diverge from previous reports. 11 1) Includes additional earnout of up to $1.15bn