Transcription
Insurance TechnologySector SummaryQ1 20191
GCA INSURANCE TECHNOLOGY OVERVIEWStrong sector and product expertise across InsurTechREPRESENTATIVE FOCUS AREASINSURTECH TEAMDISTRIBUTION &CUSTOMER ENGAGEMENTCompanies that focus on customer engagement, e.g., customer acquisition, sales andmarketing, mobile solutions and other direct-to-consumer insurance channels, or thatoffer solutions to improve distribution or facilitate engagement with the end consumer.INNOVATIVE PRODUCTS,PRICING & UNDERWRITINGCompanies that improve existing methodologies for pricing or underwriting risk, oractual insurance companies that bring technology to traditionally low-tech areas byusing newer or superior core systems and/or online/mobile offerings.POLICY ADMINISTRATION,CLAIMS & BACK OFFICEInsurance is behind the curve in enterprise-level core technology, and InsurTechcompanies help modernize these operating systems - in particular policy, claims, andbilling software systems.DATA & ANALYTICSCHRIS GOUGHManaging Directorcgough@gcaglobal.com415.318.3658KEGAN panies that provide analytic capabilities to insurance companies to help themoperate more efficiently and/or make better underwriting and claims decisions.RECENT TRANSACTIONSSoldAcquired byPreferred FinancingfromAcquired byAcquired byTender Offer forSold majority stake toToWe advised ATTOM DataSolutionsWe advised GOQiiWe Advised QuoteWizardWe Advised BexioWe Advised Risk InternationalWe Advised BlackFinStrategic InvestmentAcquired byPreferred Stock InvestmentfromAcquired byAcquired byWe Advised ControlExpertWe Advised AWLWe Advised EIS GroupWe Advised Finanzen.deWe Advised INS WebAsahi Fire & MarineInsurance Co.We Advised AsahiSoldAcquisition ofToWe Advised RGI ShareholdersWe Advised INS Web2
Q1 2019 INSURANCE TECHNOLOGY SECTOR SUMMARYCase Study: Sale of ATTOM Data Solutions to Lovell Minnick PartnersGCA acted as exclusive financial advisor to ATTOM, a leading provider of national real estate datasolutions, on its sale to Lovell Minnick Partners.TRANSACTION DETAILSClosedJanuary 2019SECTORSProperty / InsuranceTechnologyReal Estate / MortgageTechnologyDEAL TYPEM&ATransaction SummaryStrategic Rationale On January 8, 2019, Lovell Minnick Partners announcedthat it had completed the acquisition of ATTOM DataSolutions (“ATTOM” or the “Company”) ATTOM is a leading, scale platform investment in theproperty data solutions market Company’s proprietary data solutions includeproperty tax, deed, mortgage, foreclosure,environmental risk, natural hazard andneighborhood data for 150 million U.S. residentialand commercial properties, covering 99% of thenation’s population Company serves 225 data customers withmultiyear contracts ATTOM management has generated strong organicgrowth and successfully pursued accretive strategicopportunities, including its acquisition ofneighborhood data provider Onboard Informatics inearly 2018Financial terms of the transaction were notdisclosed Headquartered in Irvine, California, ATTOM is a leadingprovider of comprehensive data solutions to the realestate, mortgage, insurance, marketing and adjacentmarkets Lovell Minnick Partners is a private equity firm withexpertise in investing in the financial technology andservices industry. Since its inception in 1999, LovellMinnick Partners has raised 2.7 billion in committedcapital and has completed investments in over 45companies GCA acted as exclusive financial advisor to ATTOM inconnection with the transaction Lovell Minnick will continue to support management inexecuting its strategic plan to build the leadingtechnology platform in the real estate data industry3
EXECUTIVE SUMMARYQ1 2019 InsurTech wrap-up» InsurTech continues to be a highly active category, with 1.5Bn in financing volume and 1.9Bn in M&A volume during Q1 ’19- 90 financings in Q1 ‘19 is 58% higher than the same period in ’18, and annualized financing volume is significantly outpacing ‘18 levels- 19 M&A transactions in Q1 ‘19 is on par with 21 deals consummated during the same period in ’18- Q1 M&A volume was bolstered by Willis’ 1.4Bn acquisition of Tranzact. Adjusting for that deal, Q1 ‘19 volume is still way ahead of yearago levels: 476MM in Q1 ‘19 M&A volume vs. 225MM in Q1 ‘18» Increase in larger financings as category leaders begin to differentiate themselves and investors look to back established players- Lots of Q1 financing activity for companies utilizing data and analytics to maximize the consumer experience obtaining home, rentersand auto insurance (including Acko, The Guarantors and Jetty) as well as health / life insurance (including Clover, Limelight Health andWeFox)- Corporate venture deals continued in Q1 including Amazon’s investment in Acko, Hiscox’s investment in Coverhound and Principal’sinvestment in Limelight Health» Data & analytics and benefits administration / payroll companies lead the public company pack, trading at 5.9x and 4.8x EV/ ’19E Revenue,respectivelySelect Q1 Active InvestorsSelect Q1 Active Buyers4Notes:Source: CapIQ. CBInsights. Pitchbook.
INSURANCE VALUE CHAIN:INNOVATION ACROSS THEINSURANCE VALUE CHAINDistribution &CustomerEngagement Online Distribution & ComparisonInnovativeProducts, Pricing& UnderwritingPolicy Admin,Claims &Back Office Sales, Marketing & EngagementData &AnalyticsCustomer OriginationMobilePeer-to-Peer (P2P) Benefits Administration & Payroll Insurance Data & Analytics Innovative & Specialty Insurance Policy Management Tools & Software IoT & Telematics: Auto Health InsuranceCarrier Affiliated Claims Management Tools & Software 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 futurepublications, kindly shoot us a note at kgreene@gcaglobal.com and we would be happy to consider.5
RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTORAnnualized Q1 ’19 financing volume is significantly outpacing ’18 levelsSelected Major InsurTech Financings360 Number of Transactions Financing Volume ( USD MM)21620616312790 3,9898855 2,773 3,185 2,694 1,520 351 702201320142015201620172018Q1 '19 52MM 60MM 500MM 103MM 130MM 500MM 500MM 65MM 931MM 400MM 160MM 165MM 125MM 38MM 160MM 120MM 200MM 65MM 110MM 38MM* 50MMNotes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 3/31/19.*Oscar raised two rounds in 2014 – one worth 30MM and the other worth 80MM. 300MM 200MM6
INSURTECH DEAL DASHBOARD – FINANCING ACTIVITYFinancing volume in Q1 ’19 nearly doubled financing volume in Q1 ’18Quarterly Financing Activity ( MM)(1)Select Q1 2019 Financing Transactions ( MM)LTM financing volume: 4.6Bn across 249 DealsAmt.InvestedPostMoneyValuation3/13 65.0 3003/5 125.0NA3/5 45.0NA3/4 60.0NA2/25 15.0NA2/6 25.0NA1/30 500.0NA1/29 58.0 1551/17 33.5 841/7 43.0 95Ann.Date90CompanySelectedInvestor(s)Segment /ValueChain6261 1,5815755 1,586 1,520504943 899 883 731 621 534Q2-17Q3-17Q4-17Q1-18Q2-18Q3-18Q4-18Q1-19 32.3 15.8 14.4 16.0 26.0 16.9Average Deal Size 14.6 8.6Insurance SegmentNotes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 3/31/19.(1)Includes private company equity financings, and Everquote IPO in Q2 2018.P&CLifeInsurance Value ChainHealth7Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics& Back OfficeEngagementUnderwriting
SELECTED RECENT INSURTECH FINANCINGSRaised 25MM inSeries B funding on2/6/2019Total Funds Raised ( MM)2016Bangalore 132SelectedInvestorsUtilizes data and analytics to ensure low prices based on a customer's risk profile and offers a transparent, stress-free andseamless process of buying insurance and filing claims, enabling users to access simplified and affordable insurance policies.FoundedHeadquartersTotal Funds Raised ( MM)2014New York 27Allows consumers to meet the requirements of posting an expensive security deposit, finding a lease guarantor and obtainingrenters insurance.SelectedInvestorsRaised 15MM inSeries B funding on2/25/2019HeadquartersFoundedHeadquartersTotal Funds Raised ( MM)2015New York 41Provides insurance recommendations to customers based on proprietary algorithms and data analytics. Offers a network ofoffline facilitators to help and provide claims assistance.SelectedInvestorsRaised 65MM inSeries C funding on3/13/2019Founded8Notes:Source: CapIQ. CBInsights. Pitchbook.
INSURTECH LEADERS IN PRIVATE FUNDINGTop 10CompanyHeadquartersFoundedAmt. Raised ( MM)New York, NY2012 1,280Provider of an online health insurance networkJersey City, NJ2014 925Operator of PPO using data analysis and preventivecare to improve health insuranceSan Francisco, CA2012 598Provider of cloud-based SaaS for HR and benefitsmanagementCambridge, MA2010 503Mobile application using data and analytics tomake roads safer by making drivers betterMinneapolis, MN2015 442Partners with health systems and care partners toprovide health plansWaltham, MA2017 369Health insurance provider aiming to improvepatient care with personalized plansHaryana, India2008 355Provider of an online life insurance and generalinsurance comparison portalSan Francisco, CA2011 285Provider of pay-per-mile car insuranceSan Francisco, CA2013 259Provider of cloud-based self-insurance platformPlymouth Meeting, PA2007 220Provider of a personalized health and benefitsplatformRound of financing in Q1 2019Notes:Source: CapIQ. CBInsights. Pitchbook.Company Description9
INSURTECH COMPANY PROFILEClover HealthFoundedHeadquartersTotal Funds Raised ( MM)2014Jersey City 925Clover’s health insurance platform utilizes patient-centered analytics to reduceavoidable spending and identify and better manage chronic diseases.N/ACumulative Funds Raised ( MM)Post Money Valuation ( MM) 925 1,200 830 425 264 295 340m 135 71 100Sep-15Series A: 100Feb-16Series B: 35Jul-16Series C: 160Dec-16May-17Series D: 130Oct-17Mar-18Aug-18Jan-19Series E: 50010Notes:Source: CapIQ. CBInsights. Pitchbook.
SELECTED ACTIVE INSURTECH INVESTORSMost Active Insurance Technology InvestorsAccelerators / SeedVenture Capital /Private EquityCorporate InvestorsVenturesAlternative Investors11Notes:Source: CapIQ. CBInsights. Pitchbook.
MOST ACTIVE INSURTECH INVESTORS – CORPORATE VENTURE CAPITALCompanyHeadquartersMadison, WIMunich, GermanyMountain View, CASpringfield, MANumber of Investments111099Paris, France8Menlo Park, CA8San Francisco, CAColumbus, OHSan Francisco, CAMunich, GermanyNew York, NYInvestments7766612Notes:Source: CapIQ. CBInsights. Pitchbook.
HEALTHY M&A DEAL ACTIVITYM&A activity in Q1 ’19 was bolstered by Willis Towers Watson’s 1.4Bn acquisition of Tranzact. Annualized number of transactionsis in line with 2018 levelsSelected Major InsurTech M&A Transactions Number of Transactions M&A Volume ( USD MM)88857667587371 18,54719 8,693 7,444 5,266 5,052 5,559 1,8762013Acquirer logo on top20142015201620172018Q1 '19 1.8Bn 2.4Bn 8.7Bn 1.4Bn 2.5Bn 155MM 1.4Bn 1.1Bn 400MM 760MM 174MM 919MMUndisclosed 336MM 160MM 490MMUndisclosed 140MM 322MM 6.7BnNotes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 3/31/19.13
INSURTECH DEAL DASHBOARD – M&A ACTIVITYQ1 ‘19 volume significantly outpaced Q1 ‘18 levels thanks to Willis Towers Watson’s 1.4Bn acquisition of TranzactQuarterly M&A Activity ( MM)Select Q1 2019 M&A Transactions ( MM)LTM M&A volume: 10.0Bn across 71 deals 7,389Ann.Date(2)Carlyle’s tionValue3/31 1,4003/13 1403/11 3363/6NA2/25NA2/21NA2/7NA1/14NA1/7NA1/3NASegment /Value Chain2019191715 1,876(3)Willis’s 1.4Bnacquisitionof Tranzact 2,967 1,381 225 426Q2-17Q3-17Q4-17(1) 500 689Q1-18Q2-18 10.7 33.3 579 476Q3-18Q4-18Q1-19 369.5 34.1 81.1(2)(3)Average Deal Size 55.3 21.3 156.2Notes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 3/31/19.(1)Q4-17 includes Assurant’s 2.5Bn acquisition of Warranty Group.(2)Q3-18 includes Carlyle’s 6.7Bn acquisition of Sedgwick Claims Management.(3)Q1-19 includes Willis Towers Watson’s 1.4Bn acquisition of Tranzact.Insurance SegmentP&CLifeInsurance Value ChainHealth14Distribution & Customer Products, Pricing & Policy Admin, Claims Data & Analytics& Back OfficeEngagementUnderwriting
INSURTECH PUBLIC COMPANY VALUATIONBenefits admin. / payroll companies lead the InsurTech pack. Excluding eHealth, online distribution is performing in line with brokerageLTM Share Price Performance350%60%360 %336%50%280 %41%26%26%17%17%9%40%200 %30%120 %20%10%40%0%(40%)(10%)(20%)Mar-18Benefits Admin. a & AnalyticsInsurance SoftwareIT & BPO ServicesJan-19Online DistributionMar-19eHealthPublic InsurTech EcosystemBenefits Admin. / PayrollBrokerageData & AnalyticsInsurance SoftwareIT & BPO ServicesOnline Distribution41%17%26%9%26%17%LTM Share PricePerformanceNotes:Source: CapIq.Revenue growth and EBITDA margins shown are median values for comp group.Market data as of 3/31/19.15
INSURTECH PUBLIC COMPANY VALUATIONSelected InsurTech subsectors and multiplesEnterprise Value / 2019E RevenueEnterprise Value / 2019E .0x4.0x1.0x0.0x0.0xData SoftwareIT & lOnlineDistributionData &AnalyticsInsuranceSoftwareBrokerageIT & BPOServicesPublic InsurTech EcosystemBenefits Admin. / PayrollBrokerageData & AnalyticsInsurance SoftwareIT & BPO ServicesOnline Distribution4.8x / 18.7x3.7x / 13.7x5.9x / 15.2x2.9x / 14.4x2.1x / 12.0x2.0x / 15.9x2019E Rev. / 2019EEBITDA MultipleNotes:Source: CapIq.Revenue growth and EBITDA margins shown are median values for comp group.Market data as of 3/31/19.16
SELECTED PUBLIC COMPANY DETAIL( MM, except per share tomatic Data Processing, Inc. 159.74 69,587Paychex, Inc. 80.20 28,824Insperity, Inc. 123.66Paylocity Holding CorporationCompanyOperating MetricsRevenue GrowthTrading MetricsEBITDA MarginEV / RevenueEV / EBITDA19E/18A20E/19E19E19E20E19E20E 70,0076%7%24%4.8x4.5x19.8x17.6x 28,94517%6%41%7.2x6.8x17.6x16.5x 5,062 4,81914%12%6%1.1x1.0x17.3x14.5x 89.19 4,720 4,61620%23%28%10.2x8.3x36.2x28.3xTriNet Group, Inc. 59.74 4,192 4,3237%11%38%4.6x4.1x12.2x11.0xHealthEquity, Inc. 73.98 4,622 4,26017%15%40%12.6x10.9x31.3x26.3xBenefitfocus, Inc. 49.52 1,587 1,63417%19%7%5.4x4.6x75.0x40.5xWageWorks, Inc. 37.76 1,505 7263%3%31%1.4x1.4x4.6x4.3x 3.75 538 nefits Administration/PayrollCastlight Health, Inc.MedianBrokerageMarsh & McLennan Companies, Inc. 93.90 47,660 52,4185%5%25%3.3x3.2x13.2x13.0xAon plc 170.70 40,968 46,4755%6%28%4.1x3.9x14.8x13.6xWillis Towers Watson Public Limited Company 175.65 22,677 26,2485%4%25%2.9x2.8x11.9x11.2xArthur J. Gallagher & Co. 78.10 14,466 17,4699%7%17%2.4x2.2x14.0x12.3xBrown & Brown, Inc. 29.51 8,317 9,37216%6%30%4.0x3.8x13.3x12.5xGoosehead Insurance, Inc 27.88 403 12.8xMedianData & AnalyticsRELX PLC 21.38 41,721 49,7087%4%36%4.9x4.7x13.6x13.2xExperian plc 27.07 24,394 27,8244%9%34%5.5x5.1x16.2x14.5xVerisk Analytics, Inc. 133.00 21,747 24,3277%7%48%9.5x8.9x19.8x18.4xEquifax Inc. 118.50 14,382 16,7942%6%34%4.8x4.5x14.3x13.0xTransUnion 66.84 12,517 16,36211%8%39%6.3x5.8x16.2x14.6xFair Isaac Corporation 271.63 7,897 8,6498%7%NA7.6x7.0xNMNMCoreLogic, Inc. 37.26 2,985 4,694(7%)2%28%2.8x2.8x10.1x9.4xLiveRamp Holdings, Inc. 54.57 3,738 13.9xMedianNotes:Source: CapIq. Pitchbook.Multiples based on CapIq Consensus Estimates. Multiples 0 and 100 considered NM.17
SELECTED PUBLIC COMPANY DETAIL( MM, except per share E/18A20E/19E19E19E20E19E20EGuidewire Software, Inc. 97.16 7,910 7,14729%10%22%10.8x9.8x49.3x47.3xEbix, Inc. 49.37 1,508 2,06521%22%34%3.4x2.8x10.2x8.6xSapiens International Corporation N.V. 15.28 764 77810%8%17%2.4x2.3x14.4x12.9x 7.05 302 5xCompanyOperating MetricsRevenue GrowthTrading MetricsEBITDA MarginEV / RevenueEV / EBITDAInsurance SoftwareMajescoMedianIT & BPO ServicesAccenture plc 176.02 112,271 107,8278%7%17%2.5x2.3x14.7x13.5xTata Consultancy Services Limited 28.89 108,407 101,90912%10%26%4.5x4.1x17.2x15.6xInfosys Limited 10.74 46,547 42,78311%8%25%3.4x3.1x13.5x12.5xCognizant Technology Solutions Corporation 72.45 41,666 37,9008%8%22%2.2x2.0x10.1x9.3xDXC Technology Company 64.31 17,253 22,338(5%)2%23%1.1x1.1x4.7x4.4xHCL Technologies Limited 15.70 21,287 20,95013%11%24%2.2x2.0x9.4x8.4xCGI Inc. 68.74 18,778 20,1246%2%19%2.2x2.2x12.0x11.8xWipro Limited 3.68 22,082 18,4567%2%20%2.1x2.1x10.3x10.4x 35.18 6,665 7,60212%9%17%2.3x2.1x13.0x11.7x 1.61 2,675 3,388(2%)2%12%0.7x0.7x5.9x5.2xWNS (Holdings) Limited 53.27 2,662 2,6028%9%20%3.1x2.8x15.1x12.2xMphasis Limited 14.27 2,658 2,49313%15%18%2.1x1.8x11.5x10.1xMindtree Limited 13.63 2,239 2,09914%11%15%1.9x1.7x12.6x11.6xExlService Holdings, Inc. 60.02 2,060 2,06512%8%17%2.1x1.9x12.2x10.9xVirtusa Corporation 53.45 1,599 1,67213%13%10%1.2x1.1x12.9x9.8x 4.98 1,484 1,36717%13%16%1.7x1.5x11.0x9.8x 65.24 1,216 1,1198%NA12%1.9xNM15.8xNMCrawford & Company 9.13 490 6273%3%11%0.6x0.5x5.0x4.7xFirstsource Solutions Limited 0.68 469 xGenpact LimitedCapita plcHexaware Technologies LimitedCorVel CorporationMedianOnline DistributionMoneysupermarket.com Group PLC 4.85 2,599 2,56111%6%36%5.1x4.8x14.1x13.2xeHealth, Inc. 62.34 1,406 1,39720%20%10%6.1x5.1x63.5x32.8xQuinStreet, Inc. 13.39 667 60435%17%8%1.5x1.3x17.7x12.5xGoCompare.com Group plc 1.00 420 5067%7%25%2.4x2.3x9.9x7.9xEverQuote, Inc. 7.44 186 14528%17%(4%)0.9x0.8xNMNMiSelect Limited 0.48 104 5xMedianNotes:Source: CapIq. Pitchbook.Multiples based on CapIq Consensus Estimates. Multiples 0 and 100 considered NM.18
GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANKGlobal investment bank providing M&A and capital markets advisory services to growth companies and market leadersLEEDS PARISFRANKFURTMUNICHNEW YORKOSAKANAGOYATOKYOMANCHESTERSHANGHAILONDONNEW DELHIMILANFUKUOKASAN FRANCISCOZURICHTEL AVIVTAIPEIMUMBAIHO CHI MINH CITYSINGAPOREGlobally integratedplatform with 21offices acrossAmerica, Asia andEuropeGeographicallybalanced,synergistic andcomplementarysector focus areasacross the firmStrong in keygrowth sectorssuch as Technologyand Industrials400 professionalsStrong cross-bordercapabilities anddeal flow with 35%of all transactionscross-border375 deals closedin the last 3 years19GCA operates as GCA in America and Asia, and GCA Altium in Europe.
GCA OVERVIEWSelected FinTech experienceAcquiredPreferred FinancingAcquired byPreferred FinancingfromWe advised Bowmark CapitalWe advised LoanbooxWe advised ATTOMFinancial SaaSBanking & Lending TechAcquired bySold majority stake toReceived aninvestment fromAcquiredAcquired byWe advised GOQiiWe Advised SilverInvestment PartnersWe Advised QuoteWizardWe Advised Liqid’sshareholder HQ TrustProperty TechInsurance TechnologyPaymentsInsurance TechnologyInvestment TechnologyAcquiredAcquired byAcquired bySoldTender Offer fortoAsahi Fire & MarineInsurance Co.We Advised BexioWe Advised Risk InternationalWe Advised PrincipalWe Advised CHXFairness Opinion to ClearentWe Advised BlackFinWe Advised AsahiInsurance TechnologyInsurance TechnologyInvestment TechnologyLiquidity VenuesPaymentsInsurance TechnologyInsurance TechnologyGrowth InvestmentStrategic InvestmentSale ofSoldAcquired byFinancing fromMajority sale totoToWe Advised WorkMarketWe Advised RGI ShareholdersWe Advised RadiusWe Advised SkyslopeFinancial AdvisorFinancial AdvisorWe Advised ControlExpertFinancial SaaSInsurance TechnologyPaymentsReal Estate TechBanking & Lending TechPaymentsInsurance TechnologyAcquired byGrowth InvestmentAcquired byAcquired byGrowth InvestmentfromAcquired byPreferred Stock InvestmentfromWe Advised EdoFinancial AdvisorWe Advised VindiciaWe Advised Commissions IncWe Advised CapsilonWe Advised AWLFinancial AdvisorPaymentsPaymentsPaymentsReal Estate TechReal Estate TechInsurance TechnologyInsurance TechnologyInsurance / Property Technology TransactionNotes:The above transactions represent a compilation of deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on.20
Provider of an online life insurance and general insurance comparison portal Provider of cloud-based self-insurance platform Provider of a personalized health and benefits platform Waltham, MA 2017 369 Health insurance provider aiming to improve patient care with personalized plans Provider
