Q4 2018 Insurance Technology Sector Summary - GCA Altium
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GCA INSURANCE TECHNOLOGY OVERVIEW Strong sector and product expertise across InsurTech REPRESENTATIVE FOCUS AREAS INSURTECH TEAM Companies that focus on customer engagement, e.g., customer acquisition, sales and CHRIS GOUGH DISTRIBUTION & marketing, mobile solutions and other direct-to-consumer insurance channels, or that CUSTOMER ENGAGEMENT Managing Director offer solutions to improve distribution or facilitate contact with the end consumer. firstname.lastname@example.org Companies that improve existing methodologies for pricing or underwriting risk, or 415.318.3658 INNOVATIVE PRODUCTS, 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. Insurance is behind the curve in enterprise-level core technology, and InsurTech POLICY ADMINISTRATION, companies help modernize these operating systems - in particular policy, claims, and KEGAN GREENE CLAIMS & BACK OFFICE billing software systems. Director Companies that provide analytic capabilities to insurance companies to help them email@example.com DATA & ANALYTICS operate more efficiently and/or make better underwriting and claims decisions. 415.318.3686 RECENT INSURTECH TRANSACTIONS Sold Acquired by Preferred Financing Acquired by Sold majority stake to Tender Offer for Acquired by from To Asahi Fire & Marine Insurance Co. We advised ATTOM Data Solutions We advised GOQii We Advised QuoteWizard We Advised Bexio We Advised Risk International We Advised BlackFin We Advised Asahi Sold Strategic Investment Acquired by Preferred Stock Investment Acquisition of Acquired by Acquired by from To We Advised RGI Shareholders We Advised ControlExpert We Advised AWL We Advised EIS Group We Advised Finanzen.de We Advised INS Web We Advised INS Web 2
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY Case Study: Sale of ATTOM Data Solutions to Lovell Minnick Partners GCA acted as exclusive finanical advisor to ATTOM, a leading provider of national real estate data solutions, on its sale to Lovell Minnick Partners. Transaction Summary Strategic Rationale ▪ On January 8, 2019, Lovell Minnick Partners announced ▪ ATTOM is a leading, scale platform investment in the real that it had completed the acquisition of ATTOM Data estate data solutions market Solutions (“ATTOM” or the “Company”) − Company’s proprietary data solutions include TRANSACTION DETAILS − Financial terms of the transaction were not property tax, deed, mortgage, foreclosure, Closed disclosed environmental risk, natural hazard and January 2019 neighborhood data for 150+ million U.S. residential ▪ Headquartered in Irvine, California, ATTOM is a leading provider of comprehensive data solutions to the real and commercial properties, covering 99% of the SECTORS estate, mortgage, insurance, marketing and adjacent nation’s population Real Estate / Mortgage markets − Company serves 225+ data customers with Technology multiyear contracts Property / Insurance ▪ Lovell Minnick Partners is a private equity firm with expertise in investing in the financial technology and − ATTOM management has generated strong organic Technology services industry. Since its inception in 1999, Lovell growth and successfully pursued accretive strategic Data Licensing Minnick Partners has raised $2.7 billion in committed opportunities, including its acquisition of capital and has completed investments in over 45 DEAL TYPE neighborhood data provider Onboard Informatics in companies M&A early 2018 ▪ GCA acted as exclusive financial advisor to ATTOM in ▪ Lovell Minnick will continue to support management in connection with the transaction executing its strategic plan to build the leading technology platform in the real estate data industry 3
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY Case Study: GOQii Series B Preferred Financing from Mitsui & Co. Ltd GCA acted as exclusive financial advisor to GOQii, a health insurance tech leader, on its financing led by Mitsui. Transaction Summary Strategic Rationale ▪ On November 30, 2018, GOQii announced that it had ▪ GOQii is a leading data company in the preventative received an investment from Mitsui & Co. Ltd (“Mitsui”) healthcare ecosystem − Financial terms of the transaction were not − Uses consumer-provided health data to offer TRANSACTION DETAILS disclosed attractive discounts on insurance premiums through Closed GOQii’s distribution partnerships with leading health ▪ Founded in 2014, GOQii pairs its wearable fitness band November 2018 carriers with a smart tech-enabled healthcare platform that unites the preventive healthcare ecosystem − Offers tools for real-time personalized coaching, SECTORS scheduling health check-ups, as well as a behavioral Insurance Technology ▪ Tokyo-based Mitsui has one of the world’s largest healthcare-related portfolios with investments including rewards program complete with an online health Healthcare Technology store hospitals, pharmaceuticals, medical devices and dialysis clinics ▪ Mitsui’s investment and partnership will enable GOQii to DEAL TYPE Financing ▪ Existing investors including NEA and DSG Consumer further expand across India and enter Japan – a country Partners, and several new investors including Galaxy with an aging population and a focus on preventative Digital and Denlow Investment Trust, participated in the healthcare round ▪ GOQii will also use the funds to acquire talent and ▪ GCA acted as exclusive financial advisor to GOQii in enhance its platform connection with the transaction 4
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY Case Study: Sale of QuoteWizard.com LLC to LendingTree, Inc. (NasdaqGS: TREE) GCA acted as exclusive financial advisor to QuoteWizard, provider of a customer acquisition technology platform, on its sale to LendingTree. Transaction Summary Strategic Rationale ▪ On October 4, 2018, QuoteWizard.com LLC ▪ QuoteWizard will immediately establish LendingTree as a (“QuoteWizard”) announced it had entered into a leader in the high growth online insurance market definitive agreement to be acquired by LendingTree, Inc. − Since its founding in 2006, QuoteWizard has helped (NasdaqGS:TREE) (“LendingTree”) for up to $370MM over 40 million consumers compare and find TRANSACTION DETAILS Closed − $300MM in up-front consideration at close, payable insurance policies online October 2018 in cash ▪ QuoteWizard’s customer acquisition technology platform − $70MM in potential earn-out consideration based and network of over 30 top tier carriers and 10,000 SECTORS on achievement of certain growth milestones in the insurance agents across the country create a scale and Insurance Technology first three years following transaction close network advantage for high-quality insurance lead Digital Media distribution ▪ The QuoteWizard management team, led by CEO Scott Peyree, will continue as QuoteWizard leadership − Will significantly expand LendingTree’s relationships DEAL TYPE following closing with insurance carriers and agents enable cross M&A ▪ QuoteWizard generated $75.6MM in revenue and selling of mortgage / home related products that $12.8MM in EBITDA for the six months ending June 30, are core to LendingTree’s market 2018 ▪ Numerous product and traffic synergies as part of the ▪ GCA acted as exclusive financial advisor to QuoteWizard MyLendingTree platform and overall LendingTree in connection with the transaction consumer experience 5
EXECUTIVE SUMMARY Q4 2018 InsurTech wrap-up » InsurTech continues to be a highly active category, with ~$1.6Bn in financing volume and ~$600MM in M&A volume during Q4 ’18 - 61 financings in Q4 ‘18 is ~24% higher than the same period in ’17, but 216 total financings in ‘18 is on par with 206 total financings in ’17 - 17 M&A transactions in Q4 ‘18 is on par with the same period in ’17, but 73 total deals in ‘18 is behind pace with 88 total deals in ’17 - ‘18 M&A volume of $8.7Bn driven by Carlyle’s $6.7Bn acquisition of Sedgwick in Q3. Even adjusting for that deal, Q4 volume lagged behind Q3 levels: $579MM in Q4 M&A volume vs. $689MM in Q3 » Increase in larger financings as category leaders begin to differentiate themselves and investors look to back established players - Lots of Q4 financing activity in the health insurance space, including Bessemer’s investment in Bright Health, Andreessen’s investment in DevotedHealth and Mitsui’s investment in GOQii (we represented GOQii) - Corporate venture deals continued in Q4 including SoftBank’s investment in Cambridge Telematics and AIG’s investment in Azur » Corporate M&A continues to be active across InsurTech categories - Examples include Verisk’s acquisition of Rulebook, Majesco’s acquisition of Exaxe and Corelogic’s acquisition of Symbility » Insurance software and online distribution companies lead the public company pack, trading at 26.3x and 16.3x EV/ ‘18 EBITDA, respectively Select Q4 Active Investors Select Q4 Active Buyers Notes: 6 Source: CB Insights.
TABLE OF CONTENTS I. Q4 InsurTech Activity II. Emerging Themes Across Insurance Categories III. Appendix 7
SECTION I: Q4 INSURTECH ACTIVITY 8
RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTOR ’18 financing volume grew 25% over ’17 levels, with only a slight increase in the number of transactions Selected Major InsurTech Financings 216 = Number of Transactions 206 = Financing Volume ($USD MM) 163 127 88 55 $3,989 42 $3,185 $2,773 $2,694 $603 $702 $351 2012 2013 2014 2015 2016 2017 2018 $100MM $52MM $60MM $500MM $103MM $130MM $500MM $50MM $65MM $931MM $400MM $160MM $165MM $110MM * $38MM $160MM $120MM $200MM $38MM $50MM $300MM Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. Market data as of 12/31/18. *Oscar raised two rounds in 2014 – one worth $30MM and the other worth $80MM. $200MM 9
INSURTECH DEAL DASHBOARD – FINANCING ACTIVITY Nearly 40% of ’18 financing volume happened in Q4 Quarterly Financing Activity ($MM)(1) Select Q4 2018 Financing Transactions ($MM) LTM financing volume: Post- Segment / $4.0Bn across 216 Deals Ann. Selected Amt. Company Money Value Date Investor(s) Invested Valuation Chain 12/19 $500.0 NA 62 61 11/29 $26.2 NA 57 55 11/29 $200.0 $950 50 49 11/28 $13.9 NA $1,581 $1,586 45 43 11/26 NA NA 11/14 $70.0 $385 $899 $883 $731 $621 10/30 $35.0 $132 $534 $339 10/24 $17.1 $40 10/16 $300.0 $1,800 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Average Deal Size $7.5 $14.6 $8.6 $32.3 $15.8 $14.4 $16.0 $26.0 10/2 $16.0 $91 Insurance Segment Insurance Value Chain Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. GCA Transaction Market data as of 12/31/18. (1) Includes private company equity financings, and Everquote IPO in Q2 2018. P&C Life Health 10 Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics Engagement Underwriting & Back Office
INSURTECH LEADERS IN PRIVATE FUNDING Top 10 Company Headquarters Founded Amt. Raised ($MM) Company Description New York, NY 2012 $904 Provider of an online health insurance network 2012 Provider of cloud-based SaaS for HR and benefits San Francisco, CA $598 management Mobile application using data and analytics to Cambridge, MA 2010 $503 make roads safer by making drivers better 2015 Partners with health systems and care partners to Minneapolis, MN $442 provide health plans 2012 Operator of PPO using data analysis and preventive San Francisco, CA $425 care to improve health insurance Health insurance provider aiming to improve Waltham, MA 2017 $369 patient care with personalized plans 2008 Provider of an online life insurance and general Haryana, India $355 insurance comparison portal San Francisco, CA 2011 $295 Provider of pay-per-mile car insurance San Francisco, CA 2013 $259 Provider of cloud-based self-insurance platform 2014 Provider of a web-based service platform to Zurich, Switzerland $254 handle insurance contracts Round of financing in Q4 2018 Notes: 11 Source: Pitchbook.
HEALTHY M&A DEAL ACTIVITY M&A activity in ’18 was bolstered by Carlyle’s $6.7Bn acquisition of Sedgwick; discounting this transaction, ’18 M&A volume lagged behind ’15-’17 levels Selected Major InsurTech M&A Transactions = Number of Transactions = M&A Volume ($USD MM) 88 85 73 71 67 58 $18,547 48 $8,693 $7,444 $5,266 $5,052 $5,559 $2,851 2012 2013 2014 2015 2016 2017 2018 Acquirer logo on top $1.3Bn $1.8Bn $2.4Bn $8.7Bn $1.4Bn $2.5Bn $155MM $553MM $1.1Bn $400MM $760MM $174MM $919MM Undisclosed $160MM $490MM Undisclosed Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. $322MM $6.7Bn 12 Market data as of 12/31/18.
INSURTECH DEAL DASHBOARD – M&A ACTIVITY Q4 volume lagged behind Q3 levels, even discounting for the Carlyle / Sedgwick transaction Quarterly M&A Activity ($MM) Select Q4 2018 M&A Transactions ($MM) LTM M&A volume: Ann. Transaction Segment / $8.7Bn across 73 deals (2) Date Buyer Target $7,389 Value Value Chain 12/3 $87 11/27 NA 25 24 11/21 NA 20 21 20 19 11/13 NA 17 15 11/5 NA 10/25 NA $2,967 10/22 $122 $1,381 10/17 NA $784 $225 $500 $689 $579 $426 (1) (2) 10/17 NA Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Average Deal Size $58.8 $32.7 $55.3 $21.3 $156.2 $10.7 $33.3 $369.5 10/4 $370 Insurance Segment Insurance Value Chain Notes: Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. GCA Transaction Market data as of 12/31/18. (1) Q4-17 includes Assurant’s $2.5Bn acquisition of Warranty Group. P&C Life Health 13 Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics (2) Q3-18 includes Carlyle’s $6.7Bn acquisition of Sedgwick Claims Management. Engagement Underwriting & Back Office
INSURTECH PUBLIC COMPANY VALUATION Selected InsurTech subsectors and key operating stats LTM Share Price Performance 141% 135% 115% 95% 75% 55% 37% 35% 11% 15% 5% (5%) 3% (4%) (25%) Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-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 11% 3% 5% (4%) 37% 141% LTM Share Price Performance Notes: Source: CapIq. Revenue growth and EBITDA margins shown are median values for comp group. Market data as of 12/31/18. 14
INSURTECH PUBLIC COMPANY VALUATION Selected InsurTech subsectors and key operating stats Enterprise Value / 2018E Revenue Enterprise Value / 2018E EBITDA 6.0x 30.0x 26.3x 5.1x 5.0x 25.0x 4.2x 4.0x 20.0x 16.3x 16.2x 3.1x 15.3x 2.8x 13.9x 3.0x 15.0x 12.4x 2.1x 2.0x 2.0x 10.0x 1.0x 5.0x 0.0x 0.0x Data & Analytics Benefits Brokerage Insurance Online IT & BPO Insurance Online Benefits Data & Brokerage IT & BPO Admin./Payroll Software Distribution Services Software Distribution Admin./Payroll Analytics Services Public InsurTech Ecosystem Benefits Admin. / Payroll Brokerage Data & Analytics Insurance Software IT & BPO Services Online Distribution 4.0x / 15.2x 2.9x / 12.4x 5.0x / 13.8x 2.4x / 18.7x 1.9x / 10.7x 1.9x / 10.4x 2019E Rev. / 2019E EBITDA Multiple Notes: Source: CapIq. Revenue growth and EBITDA margins shown are median values for comp group. Market data as of 12/31/18. 15
SECTION II: EMERGING THEMES ACROSS INSURANCE CATEGORIES 16
INSURANCE VALUE CHAIN: INSURTECH LANDSCAPE Distribution & Innovative Policy Admin, Data & Customer Products, Pricing Claims & Analytics 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 publications, kindly 17 shoot us a note at firstname.lastname@example.org and we would be happy to consider.
INNOVATION ACROSS INSURANCE CATEGORIES Home renting/ownership is driving technology innovation across a variety of insurance categories Selected Insurance Categories and Representative Companies Home and Renters Title Provides lease Provides a real estate guarantor services transaction platform to for renters through handle title, escrow, and an online portal closing The Home is the Specialty center driving Auto multiple insurance Offers auto insurance quotes Offers on-demand use cases on your mobile device with a personal item insurance picture of your license Small Commercial (SMB) Health Operates a healthcare Operates an online business platform to help insurance agency to Life compare and choose connect business owners health plans with industry specialists Connects consumers to life insurance products from major insurers 18
HOME AND RENTERS Market Overview Emerging Themes » Homeowners insurance is a ~$75Bn premium market » As home buying goes digital, mobile homeowners / title » Renters / condo insurance is a ~$5Bn premium market Digital insurance and mortgage solutions will become the norm – ~60% of renters are uninsured insurance » Digitally fluent home buyers will expect a connected, bundling – ~43% of millennials are renters seamless insurance and mortgage experience Key Stats » Advances in machine learning combined with cheaper % Insured in Homeowners vs. Renters aerial imagery have created a unique cost-saving Geospatial opportunity in property insurance 5% analytics » Providers are using geospatial analytics to extract data on Homeowners property features to inform policy pricing Renters 41% 95% Insured 59% » 31% of millennials say that the process of buying home Uninsured Millennial and renters insurance is too complicated opportunity » 33% of millennials say it has never occurred to them to 2017 Top Home Insurers buy renters insurance $17.6 Disruptors Top 10 = $56Bn in Premiums Premiums ($Bn) Direct Written $8.0 $6.5 Digital platform Leverages geospatial Provides an online Partners with A- $4.7 $4.6 $3.5 $3.3 $3.0 $2.8 simplifies mortgage imagery to enable portal to connect rated carriers to $1.6 lending; recently insurance carriers to consumers and provide home launched a home access property data mortgage lenders as insurance quotes in State Farm Allstate liberty USAA Farmers Travelers Nationwide American Chubb Erie Mutual Insurance Family insurance offering and analytics well as compare ~60 seconds insurance quotes Legacy Players Allows consumers to Provides lease Integrates directly with Offers on-demand meet requirements of guarantor services lenders and insurance pay-per-use rental Disruptors security deposits and for renters through carriers, enabling insurance coverage other home buying / an online portal homeowners to analyze renting commitments property data 19 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
TITLE Market Overview Emerging Themes » Title insurance represents a $14Bn+ market opportunity Millennials » Millennial entrance into the housing market poses the » Traditional relationships between local mortgage lenders and title entering the largest threat to the traditional title insurance model, as agents dominate the title insurance market, leading to housing they will expect digital and tech-enabled real estate fragmentation and lack of widespread adoption of a single carrier market solutions Key Stats » Digitization of the home buying process will lead to Title Insurance Market Size digitization and consolidation of the title insurance market Premiums ($Bn) $13.9 $14.0 % Who Used Internet in % Who Used Mobile in Direct Written $12.9 Home Search Home Search $12.0 Digitization 99% $10.3 of the 58% home 89% buying 2014 2015 2016 2017 2018P process Market Share Analysis 77% 10% 7% Market share owned by: Other Providers 13% Millenial Baby Boomer Silent Generation Millenial Baby Boomer Silent Generation (NAT, TRG, WFG, Millennial Older Boomers Silent Generation Westcor) Disruptors 87% Legacy Players Developer of a cloud- Operates a predictive Provides a real estate based real estate analytics platform to transaction platform transaction determine risk and to handle title, escrow, Disruptors management severity of title and closing software defects 20 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
AUTO Market Overview Emerging Themes » Personal auto insurance is a ~$260Bn+ premium market annually » Data penetration remains low in auto insurance » Auto insurance accounts for 40%+ of the broader $640Bn P&C market number of connected drivers in North America is ~5% Usage- Key Stats » Opportunity to use mobile apps to track driver behavior based auto Personal Auto Insurance Market Size insurance » Proliferation of the sharing economy with the likes of Uber, Airbnb, and Getaround is driving the need for innovative insurance products $247 $267 » Increasingly, the use of software and smartphone Premiums ($Bn) $230 Direct Written $207 $218 cameras help insurers automate claims for vehicles Virtual damaged in accidents claims » Allstate has phased out 900+ drive-in inspection stations where customers could previously take a 2013 2014 2015 2016 2017 damaged car for assessment 2017 Top Private Passenger Auto Insurers Disruptors $41.8 Top 10 = $167Bn in Premiums Offers affordable car Provider of an online Pay as you go car Premiums ($Bn) Direct Written $29.6 insurance by eliminating insurance insurance that can be $22.8 $21.4 the traditional broker marketplace to paid by the hour, day, $13.2 $11.6 $10.4 model compare rates week, or month $7.3 $4.4 $4.4 State Farm Berkshire Progressive Allstate USAA Liberty Farmers Nationwide Travelers American Offers auto insurance Offers car Provides auto insurance Hathwaay Mutual Insurance Family Group of quotes on your mobile insurance plans that lets you pick the Companies device with a picture of for young and people you want included your license learning drivers in your insurance pool Legacy Players Disruptors Provider of pay-per- Gives drivers customized Provider of virtual claims mile car insurance quotes based on actual technology to the auto platform driving behaviors insurance market 21 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
HEALTH Market Overview Emerging Themes » Health insurance is a ~$1Tn+ premium market annually » Innovations are emerging for doctors and hospitals to » Comparison platforms have taken off due to their ability to allow implement real-time patient monitoring consumers to reduce costs next step is customizable, tailored Wearables supplemental plans that can be processed and purchased in minutes » Insurers have expressed interest in using the same data to evaluate health risk Key Stats Health Insurance Market Size » Insurers increasingly harness new technologies in Data-driven genome sequencing and genetic data collection to patient care determine potential risks and price policies accordingly $1,030 Premiums ($Bn) $974 Direct Written $824 $910 $745 » Communication between doctors and patients will increasingly become digitized Remote healthcare » Remote diagnoses with artificial intelligence eventually replacing non-urgent healthcare visits 2013 2014 2015 2016 2017 2017 Top Health Insurers $52.2 Disruptors Premiums ($Bn) Direct Written Top 10 = $141Bn in Premiums $30.1 Partners with health Operates health insurance $17.8 $15.0 systems and care partners portal and comparison site, $7.6 to provide low cost, offering a variety of health $5.9 $4.0 $3.8 $2.7 $2.0 customizable health plans insurance plans Operates a platform intended to Uses data and machine Legacy Players help users research prices on intelligence to give customers tips doctors, hospitals, health and insights regarding health Disruptors insurance plans, dentists and insurance policies and medical procedures recommendations based on their needs 22 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
LIFE Market Overview Emerging Themes » Life Insurance is a ~$850Bn premium market annually » Policyholders often fail to review and update their life » Top 10 Insurers account for ~25% of the market share insurance policies to account for major events such as Customer getting married, having children or changing jobs Key Stats centric » Disruptors are focused on building products to help Life Insurance Market Size products customers better navigate the life purchasing process and make effortless policy adjustments $848 $815 $824 » Carriers are partnering with wellness companies to Premiums ($Bn) Direct Written $771 $777 provide policyholders with discounts and perks for Interactive meeting exercise targets life » Companies focused on wearables, sensors, and analytics insurance around consumer data have become central to the life 2013 2014 2015 2016 2017 insurance landscape 2017 Top Life Insurers Disruptors $86.6 Top 10 = $212Bn in Premiums Provides on-demand life Connects consumers Offers product guides and Premiums ($Bn) Direct Written insurance platform using a to life insurance resources, to give consumers proprietary algorithmic products from major better knowledge about life $29.6 underwriting engine insurers and health insurance products $22.8 $21.4 $13.2 $11.6 $10.4 $7.3 $4.4 $4.4 Originates simplified life Scores users on Instant insurance platform insurance products current health and streamlines life insurance through its online portal lifestyle to help lower process by eliminating the for Vantis Life insurance premiums commissioned sales agents Legacy Players Operates a platform Provides a platform to Provides platform designed Disruptors designed to compare free help compare quotes to manage relationships quotes from top life for a variety of life between life insurers, insurers insurance products agents, policyholders 23 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
SMALL COMMERCIAL (SMB) Market Overview Emerging Themes » Small commercial insurance is a $100Bn market Digital » 25%+ of small commercial insurance premiums are » Highly fragmented market no single insurer has more than 5-6% expected to be digitally underwritten by 2020 policies market share » 24% of small businesses purchased their most recent insurance online » 60% of small businesses in the U.S. will be owned by millennials and generation Xers by 2020 » Freelancers Union = 375,000 members large SMB Key Stats insurance opportunity for the gig economy Commercial Insurance Market Share » 33% of US small businesses would prefer purchasing Millennials commercial insurance online 5.5% 5.5% becoming Market Share of Total 5.1% » For millennial small business owners, this number Direct Premiums 4.2% 4.2% small business climbs to 75% 3.3% 2.8% 2.7% 2.6% owners Online SMB Insurance Purchasing 2.1% Regular Overall SMB Market 33% Chubb Travelers Liberty AIG Zurich insurance CNAs Financial Berkshire hathaway Nationwide mutual Hartford Tokio Marine Financial Group Millenial owned Millennial SMB Market 75% group Corp group Services Disruptors Legacy Players Disruptors Offers a mobile Operates an online Provides a platform insurance marketplace business insurance for general and for freelancers and the agency to connect professional liability gig economy business owners with insurance industry specialists 24 Source: CB Insights, NAIC, Insurance Information Institute, NAR.
SPECIALTY INSURANCE Personal Item Peer-To-Peer Travelers » Offers on-demand single » Members can seek out » Provides daily health/travel item insurance groups with similar interests insurance on the go who want similar products » Allows customers to insure » Fully mobile, designed to to be covered, e.g., pet everyday tech, sports offer insurance for travelers insurance equipment, music doing activities like skiing equipment, and more, » Claims are paid out from and diving instantly, from their mobile peer groups with like device interests » Offers insurance quotes on » Customers are able to » Offers real-time travel and personal items just by insure their belongings medical insurance sending in a picture based on pools made up of » Instant claims payouts go individuals with similar » Customers can purchase straight to a customer’s interests auto, homeowners, jewelry, TravelCard debit card phone or pet insurance » Takes on no underwriting risk – purely peer driven 25 Source: Company Websites, Crunchbase, Pitchbook.
SECTION III: APPENDIX 26
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 12/31/18 Value Value 18E/17A 19E/18E 18E 18E 19E 18E 19E Benefits Administration/Payroll Automatic Data Processing, Inc. $131.12 $57,395 $58,233 8% 6% 22% 4.2x 4.0x 19.0x 16.2x Paychex, Inc. $65.15 $23,395 $22,693 7% 15% 41% 6.6x 5.7x 16.2x 14.2x Insperity, Inc. $93.36 $3,903 $3,642 16% 12% 6% 1.0x 0.8x 15.4x 13.3x HealthEquity, Inc. $59.65 $3,721 $3,391 24% 21% 40% 11.9x 9.8x 30.0x 24.3x TriNet Group, Inc. $41.95 $2,955 $3,098 9% 7% 39% 3.5x 3.3x 9.1x 8.7x Paylocity Holding Corporation $60.21 $3,179 $3,094 25% 22% 21% 8.3x 6.8x 38.6x 30.2x Benefitfocus, Inc. $45.72 $1,461 $1,540 9% 12% 4% 6.0x 5.3x NM 80.6x WageWorks, Inc. $27.16 $1,077 $429 2% 3% 30% 0.9x 0.8x 2.9x 2.7x Castlight Health, Inc. $2.17 $303 $240 16% 2% (9%) 1.6x 1.5x NM NM Median 9% 12% 22% 4.2x 4.0x 16.2x 15.2x Brokerage Marsh & McLennan Companies, Inc. $79.75 $40,171 $45,370 7% 6% 24% 3.0x 2.9x 12.7x 11.5x Aon plc $145.36 $35,009 $40,764 8% 6% 26% 3.8x 3.6x 14.4x 13.2x Willis Towers Watson Public Limited Company $151.86 $19,732 $23,485 4% 4% 25% 2.8x 2.6x 11.1x 10.5x Arthur J. Gallagher & Co. $73.70 $13,535 $16,461 10% 8% 17% 2.4x 2.2x 14.2x 12.4x Brown & Brown, Inc. $27.56 $7,788 $8,215 7% 16% 30% 4.1x 3.5x 13.5x 11.7x Jardine Lloyd Thompson Group plc $24.11 $5,119 $5,719 (1%) 7% 22% 3.1x 2.9x 13.9x 12.4x Goosehead Insurance, Inc $26.29 $356 $387 43% 40% 26% 6.4x 4.5x 24.5x 16.6x Median 7% 7% 25% 3.1x 2.9x 13.9x 12.4x Data & Analytics RELX PLC $20.60 $40,492 $48,770 (3%) 5% 35% 5.1x 4.9x 14.5x 13.8x Experian plc $24.28 $21,804 $25,234 13% 3% 34% 5.2x 5.0x 15.3x 14.7x Verisk Analytics, Inc. $109.04 $17,950 $20,386 12% 7% 47% 8.5x 8.0x 18.0x 16.7x TransUnion $56.80 $10,525 $14,396 21% 14% 39% 6.2x 5.4x 15.7x 13.7x Equifax Inc. $93.13 $11,229 $13,608 2% 4% 34% 4.0x 3.8x 11.8x 11.2x The Dun & Bradstreet Corporation $142.74 $5,300 $6,403 (1%) 4% 29% 3.7x 3.6x 12.5x 11.8x Fair Isaac Corporation $187.00 $5,415 $6,089 12% 8% 23% 5.7x 5.3x 25.3x 23.5x CoreLogic, Inc. $33.42 $2,692 $4,359 (3%) (1%) 27% 2.4x 2.4x 9.0x 8.9x LiveRamp Holdings, Inc. $38.63 $2,627 $2,767 (13%) (55%) 15% 3.5x 8.0x 23.7x NM Median 2% 4% 34% 5.1x 5.0x 15.3x 13.8x Notes: Source: CapIq. Pitchbook. 27 Multiples based on CapIq Consensus Estimates. Multiples 100 considered NM.
SELECTED PUBLIC COMPANY DETAIL ($MM, except per share data) Stock Operating Metrics Trading Metrics Price Equity Enterprise Revenue Growth EBITDA Margin EV / Revenue EV / EBITDA Company 12/31/18 Value Value 18E/17A 19E/18E 18E 18E 19E 18E 19E Insurance Software Guidewire Software, Inc. $80.23 $6,501 $5,718 29% 10% 22% 8.7x 7.9x 39.4x 37.9x Ebix, Inc. $42.56 $1,331 $1,828 35% 22% 33% 3.7x 3.0x 11.1x 9.3x Sapiens International Corporation N.V. $11.03 $550 $565 7% 6% 15% 2.0x 1.9x 13.2x 11.8x Majesco $7.09 $260 $257 37% 19% 3% 1.6x 1.3x 48.7x 25.7x Median 32% 14% 18% 2.8x 2.4x 26.3x 18.7x IT & BPO Services Tata Consultancy Services Limited $27.20 $102,061 $97,471 7% 13% 27% 4.8x 4.3x 17.5x 15.5x Accenture plc $141.01 $89,887 $85,544 13% 7% 17% 2.1x 2.0x 12.4x 11.7x Infosys Limited $9.47 $41,163 $37,655 4% 12% 26% 3.3x 2.9x 12.7x 11.7x Cognizant Technology Solutions Corporation $63.48 $36,757 $32,718 9% 8% 21% 2.0x 1.9x 9.8x 8.7x DXC Technology Company $53.17 $14,894 $19,141 8% (4%) 22% 0.9x 0.9x 3.9x 4.1x HCL Technologies Limited $13.86 $19,296 $18,898 6% 14% 23% 2.3x 2.0x 9.8x 8.5x Wipro Limited $4.74 $21,353 $18,378 (3%) 8% 18% 2.2x 2.0x 12.0x 10.8x CGI Group Inc. $61.19 $16,915 $18,223 (3%) 3% 18% 2.1x 2.1x 11.6x 11.1x Genpact Limited $26.99 $5,130 $6,073 9% 10% 16% 2.0x 1.9x 12.6x 11.0x Capita plc $1.43 $2,370 $3,484 (11%) (4%) 10% 0.7x 0.7x 6.8x 6.3x Mphasis Limited $14.57 $2,818 $2,538 9% 15% 17% 2.4x 2.0x 13.7x 11.5x WNS (Holdings) Limited $41.26 $2,060 $2,053 13% 8% 19% 2.6x 2.4x 13.9x 13.3x Mindtree Limited $12.42 $2,040 $1,930 15% 17% 15% 2.0x 1.7x 13.1x 10.8x ExlService Holdings, Inc. $52.62 $1,803 $1,861 16% 13% 17% 2.1x 1.9x 12.5x 10.6x Virtusa Corporation $42.59 $1,274 $1,369 24% 14% 8% 1.1x 1.0x 14.7x 10.2x Hexaware Technologies Limited $4.78 $1,422 $1,324 8% 17% 16% 2.0x 1.7x 12.2x 10.2x CorVel Corporation $61.72 $1,157 $1,067 8% NA 12% 1.8x NM 15.0x NM Crawford & Company $9.00 $496 $656 (0%) 2% 10% 0.6x 0.6x 5.8x 5.1x Firstsource Solutions Limited $0.67 $465 $520 (2%) 12% 14% 1.0x 0.9x 6.8x 6.5x Median 8% 11% 17% 2.0x 1.9x 12.4x 10.7x Online Distribution Moneysupermarket.com Group PLC $3.51 $1,883 $1,851 0% 8% 37% 4.1x 3.8x 11.3x 10.4x QuinStreet, Inc. $16.23 $800 $729 35% 17% 8% 1.8x 1.5x 21.3x 15.1x eHealth, Inc. $38.42 $746 $725 20% 20% 10% 3.2x 2.7x 33.0x 17.0x GoCompare.com Group plc $0.87 $365 $462 (1%) 7% 30% 2.3x 2.2x 7.8x 7.0x iSelect Limited $0.54 $117 $93 (2%) 5% (3%) 0.5x 0.5x NM 4.4x EverQuote, Inc. $4.18 $105 $66 28% 17% (4%) 0.4x 0.3x NM NM Median 10% 13% 9% 2.1x 1.9x 16.3x 10.4x Notes: Source: CapIq. Pitchbook. 28 Multiples based on CapIq Consensus Estimates. Multiples 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 LONDON SHANGHAI PARIS NEW DELHI MILAN SAN FRANCISCO ZURICH TEL AVIV TAIPEI MUMBAI HO CHI MINH CITY SINGAPORE Geographically Globally integrated Strong cross-border balanced, Strong in key platform with 19 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 29 GCA operates as GCA in America and Asia, and GCA Altium in Europe.
GCA OVERVIEW Selected FinTech experience Preferred Financing Acquired Acquired by Received an Acquired by Acquired by investment from Sold majority stake to from We advised ATTOM Data We Advised Silver We Advised Liqid’s Solutions We advised GOQii Investment Partners We Advised QuoteWizard shareholder HQ Trust We Advised Bexio We Advised Risk International Property Tech Insurance Technology Payments Insurance Technology Investment Technology Insurance Technology Insurance Technology Sold Sold Acquired Acquired by by Acquired by Tender Offer for Acquired by Acquired To Asahi Fire & Marine To Insurance Co. We Advised Principal We Advised CHX Fairness Opinion to Clearent We Advised BlackFin We Advised Asahi We Advised WorkMarket We Advised RGI Shareholders Investment Technology Liquidity Venues Payments Insurance Technology Insurance Technology Financial SaaS Insurance Technology Sale of Majority sale to Growth Investment Strategic Investment Acquired by Growth Investment Financing from to We Advised Radius We Advised Skyslope Financial Advisor Financial Advisor We Advised ControlExpert We Advised Edo Financial Advisor Payments Real Estate Tech Banking & Lending Tech Payments Insurance Technology Payments Payments Growth Investment Acquired by Acquired by from Acquisition of Acquisition of Acquired by Preferred Stock Investment from We Advised Vindicia We Advised Commissions Inc We Advised Capsilon We Advised TSYS We Advised Blucora We Advised AWL Financial Advisor Payments Real Estate Tech Real Estate Tech Payments Investment Technology Insurance Technology Insurance Technology Notes: Insurance Technology Transaction 30 The above transactions represent a compilation of deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on.
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