Q4 2018 Insurance Technology Sector Summary - GCA Altium
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Insurance Technology
Sector Summary
Q4 2018
1
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.
cgough@gcaglobal.com
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 kgreene@gcaglobal.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
4Q4 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
5EXECUTIVE 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. $689MM in Q3
» Increase in larger financings as category leaders begin to differentiate themselves and investors look to back established players
- Lots of Q4 financing activity in the health insurance space, including Bessemer’s investment in Bright Health, Andreessen’s investment
in DevotedHealth and Mitsui’s investment in GOQii (we represented GOQii)
- Corporate venture deals continued in Q4 including SoftBank’s investment in Cambridge Telematics and AIG’s investment in Azur
» Corporate M&A continues to be active across InsurTech categories
- Examples include Verisk’s acquisition of Rulebook, Majesco’s acquisition of Exaxe and Corelogic’s acquisition of Symbility
» Insurance software and online distribution companies lead the public company pack, trading at 26.3x and 16.3x EV/ ‘18 EBITDA, respectively
Select Q4 Active Investors Select Q4 Active Buyers
Notes: 6
Source: CB Insights.TABLE OF CONTENTS
I. Q4 InsurTech Activity
II. Emerging Themes Across Insurance Categories
III. Appendix
7SECTION I:
Q4 INSURTECH ACTIVITY
8RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTOR
’18 financing volume grew 25% over ’17 levels, with only a slight increase in the number of transactions
Selected Major InsurTech Financings
216
= Number of Transactions 206
= Financing Volume ($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.
$200MM 9INSURTECH DEAL DASHBOARD – FINANCING ACTIVITY
Nearly 40% of ’18 financing volume happened in Q4
Quarterly Financing Activity ($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 $91
Insurance Segment Insurance Value Chain
Notes:
Source: CB Insights, Pitchbook. CapIq. GCA Deal Database. GCA Transaction
Market data as of 12/31/18.
(1) Includes private company equity financings, and Everquote IPO in Q2 2018. P&C Life Health
10
Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics
Engagement Underwriting & Back OfficeINSURTECH LEADERS IN PRIVATE FUNDING
Top 10
Company Headquarters Founded Amt. Raised ($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 OfficeINSURTECH 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.
14INSURTECH 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.
15SECTION II:
EMERGING THEMES ACROSS INSURANCE
CATEGORIES
16INSURANCE 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 kgreene@gcaglobal.com 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
18HOME 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
26SELECTED 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.You can also read
