GCA InsurTech Sector Report Q3 2018 · Notes: 6 Source: CB Insights. EXECUTIVE SUMMARY Q4 2018...
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1 Insurance Technology Sector Summary Q4 2018
Transcript of GCA InsurTech Sector Report Q3 2018 · Notes: 6 Source: CB Insights. EXECUTIVE SUMMARY Q4 2018...
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Insurance TechnologySector Summary
Q4 2018
2
CHRIS GOUGHManaging [email protected]
KEGAN [email protected]
Strong sector and product expertise across InsurTech
GCA INSURANCE TECHNOLOGY OVERVIEW
Companies that focus on customer engagement, e.g., customer acquisition, sales and marketing, mobile solutions and other direct-to-consumer insurance channels, or that offer solutions to improve distribution or facilitate contact with the end consumer.
DISTRIBUTION & CUSTOMER ENGAGEMENT
RECENT INSURTECH TRANSACTIONS
REPRESENTATIVE FOCUS AREAS INSURTECH TEAM
Companies that improve existing methodologies for pricing or underwriting risk, or actual insurance companies that bring technology to traditionally low-tech areas by using newer or superior core systems and/or online/mobile offerings.
INNOVATIVE PRODUCTS, PRICING & UNDERWRITING
Insurance is behind the curve in enterprise-level core technology, and InsurTech companies help modernize these operating systems - in particular policy, claims, and billing software systems.
POLICY ADMINISTRATION, CLAIMS & BACK OFFICE
Companies that provide analytic capabilities to insurance companies to help them operate more efficiently and/or make better underwriting and claims decisions.
DATA & ANALYTICS
We Advised AWL
Acquired by
We Advised Finanzen.de
Acquired byPreferred Stock Investmentfrom
We Advised EIS Group
Strategic Investment
We Advised ControlExpert
Acquired by
We Advised INS Web
Sold
To
We Advised RGI Shareholders
Preferred Financingfrom
We advised GOQii
Tender Offer for
Asahi Fire & MarineInsurance Co.
We Advised AsahiWe Advised BlackFin
Sold
To
We Advised Risk International
Sold majority stake to
We Advised QuoteWizard
Acquired by
We Advised Bexio
Acquired by
We Advised INS Web
Acquisition of
Acquired by
We advised ATTOM Data Solutions
3
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 DETAILS
Closed
January 2019
SECTORS
Real Estate / Mortgage
Technology
Property / Insurance
Technology
Data Licensing
DEAL TYPE
M&A
Transaction Summary
▪ On January 8, 2019, Lovell Minnick Partners announced that it had completed the acquisition of ATTOM Data Solutions (“ATTOM” or the “Company”)
− Financial terms of the transaction were not
disclosed
▪ Headquartered in Irvine, California, ATTOM is a leading provider of comprehensive data solutions to the real estate, mortgage, insurance, marketing and adjacent markets
▪ Lovell Minnick Partners is a private equity firm with expertise in investing in the financial technology and services industry. Since its inception in 1999, Lovell Minnick Partners has raised $2.7 billion in committed capital and has completed investments in over 45 companies
▪ GCA acted as exclusive financial advisor to ATTOM in connection with the transaction
Strategic Rationale
▪ ATTOM is a leading, scale platform investment in the real estate data solutions market
− Company’s proprietary data solutions include
property tax, deed, mortgage, foreclosure,
environmental risk, natural hazard and
neighborhood data for 150+ million U.S. residential
and commercial properties, covering 99% of the
nation’s population
− Company serves 225+ data customers with
multiyear contracts
− ATTOM management has generated strong organic
growth and successfully pursued accretive strategic
opportunities, including its acquisition of
neighborhood data provider Onboard Informatics in
early 2018
▪ Lovell Minnick will continue to support management in executing its strategic plan to build the leading technology platform in the real estate data industry
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY
Case Study: Sale of ATTOM Data Solutions to Lovell Minnick Partners
4
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY
GCA acted as exclusive financial advisor to GOQii, a health insurance tech leader, on its financing led by Mitsui.
TRANSACTION DETAILS
Closed
November 2018
SECTORS
Insurance Technology
Healthcare Technology
DEAL TYPE
Financing
Transaction Summary
▪ On November 30, 2018, GOQii announced that it had received an investment from Mitsui & Co. Ltd (“Mitsui”)
− Financial terms of the transaction were not
disclosed
▪ Founded in 2014, GOQii pairs its wearable fitness band with a smart tech-enabled healthcare platform that unites the preventive healthcare ecosystem
▪ Tokyo-based Mitsui has one of the world’s largest healthcare-related portfolios with investments including hospitals, pharmaceuticals, medical devices and dialysis clinics
▪ Existing investors including NEA and DSG Consumer Partners, and several new investors including Galaxy Digital and Denlow Investment Trust, participated in the round
▪ GCA acted as exclusive financial advisor to GOQii in connection with the transaction
Strategic Rationale
▪ GOQii is a leading data company in the preventative healthcare ecosystem
− Uses consumer-provided health data to offer
attractive discounts on insurance premiums through
GOQii’s distribution partnerships with leading health
carriers
− Offers tools for real-time personalized coaching,
scheduling health check-ups, as well as a behavioral
rewards program complete with an online health
store
▪ Mitsui’s investment and partnership will enable GOQii to further expand across India and enter Japan – a country with an aging population and a focus on preventative healthcare
▪ GOQii will also use the funds to acquire talent and enhance its platform
Case Study: GOQii Series B Preferred Financing from Mitsui & Co. Ltd
5
Case Study: Sale of QuoteWizard.com LLC to LendingTree, Inc. (NasdaqGS: TREE)
Q4 2018 INSURANCE TECHNOLOGY SECTOR SUMMARY
GCA acted as exclusive financial advisor to QuoteWizard, provider of a customer acquisition technology platform, on its sale to LendingTree.
TRANSACTION DETAILS
Closed
October 2018
SECTORS
Insurance Technology
Digital Media
DEAL TYPE
M&A
Transaction Summary
▪ On October 4, 2018, QuoteWizard.com LLC (“QuoteWizard”) announced it had entered into a definitive agreement to be acquired by LendingTree, Inc. (NasdaqGS:TREE) (“LendingTree”) for up to $370MM
− $300MM in up-front consideration at close, payable
in cash
− $70MM in potential earn-out consideration based
on achievement of certain growth milestones in the
first three years following transaction close
▪ The QuoteWizard management team, led by CEO Scott Peyree, will continue as QuoteWizard leadership following closing
▪ QuoteWizard generated $75.6MM in revenue and $12.8MM in EBITDA for the six months ending June 30, 2018
▪ GCA acted as exclusive financial advisor to QuoteWizard in connection with the transaction
Strategic Rationale
▪ QuoteWizard will immediately establish LendingTree as a leader in the high growth online insurance market
− Since its founding in 2006, QuoteWizard has helped
over 40 million consumers compare and find
insurance policies online
▪ QuoteWizard’s customer acquisition technology platform and network of over 30 top tier carriers and 10,000 insurance agents across the country create a scale and network advantage for high-quality insurance lead distribution
− Will significantly expand LendingTree’s relationships
with insurance carriers and agents enable cross
selling of mortgage / home related products that
are core to LendingTree’s market
▪ Numerous product and traffic synergies as part of the MyLendingTree platform and overall LendingTree consumer experience
6Notes:Source: CB Insights.
EXECUTIVE SUMMARY
Q4 2018 InsurTech wrap-up
Select Q4 Active Investors Select Q4 Active Buyers
» 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
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TABLE OF CONTENTS
I. Q4 InsurTech Activity
II. Emerging Themes Across Insurance Categories
III. Appendix
8
SECTION I:
Q4 INSURTECH ACTIVITY
9
$603 $351$702
$2,773 $2,694$3,185
$3,989
2012 2013 2014 2015 2016 2017 2018
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 $80MM.
’18 financing volume grew 25% over ’17 levels, with only a slight increase in the number of transactions
RECORD INVESTMENT IN INSURANCE TECHNOLOGY SECTOR
4255
88
127
163
206216
Selected Major InsurTech Financings
= Number of Transactions
= Financing Volume ($USD MM)
$100MM $52MM
$50MM
$60MM
$65MM
$38MM
$110MM
$500MM
$931MM
$38MM $120MM$160MM
$103MM
$400MM
$130MM $500MM
$200MM
$165MM
$50MM
*
$300MM
$200MM
$160MM
10
$339
$731
$534
$1,581
$899
$621
$883
$1,586
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Ann. Date
CompanySelected
Investor(s)Amt.
Invested
Post-Money
Valuation
Segment / Value Chain
12/19 $500.0 NA
11/29 $26.2 NA
11/29 $200.0 $950
11/28 $13.9 NA
11/26 NA NA
11/14 $70.0 $385
10/30 $35.0 $132
10/24 $17.1 $40
10/16 $300.0 $1,800
10/2 $16.0 $91
Notes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 12/31/18.(1) Includes private company equity financings, and Everquote IPO in Q2 2018.
Nearly 40% of ’18 financing volume happened in Q4
INSURTECH DEAL DASHBOARD – FINANCING ACTIVITY
Quarterly Financing Activity ($MM)(1)
55
49
45
50
62
57
43
$7.5 $14.6 $8.6 $32.3 $15.8 $14.4 $16.0
Select Q4 2018 Financing Transactions ($MM)
61
$26.0
P&C Life Health Distribution & CustomerEngagement
Products, Pricing & Underwriting
Data & AnalyticsPolicy Admin, Claims & Back Office
Insurance Segment Insurance Value Chain
LTM financing volume: $4.0Bn across 216 Deals
Average Deal Size
GCA Transaction
11Notes:Source: Pitchbook.
Top 10
INSURTECH LEADERS IN PRIVATE FUNDING
Company Headquarters Founded
New York, NY
San Francisco, CA
San Francisco, CA
Haryana, India
San Francisco, CA
Zurich, Switzerland
Minneapolis, MN
Cambridge, MA
Waltham, MA
San Francisco, CA
Amt. Raised ($MM) Company Description
$904
$598
$425
$355
$259
$254
$442
$503
$369
$295
2012
2012
2012
2008
2013
2014
2015
2010
2017
2011
Provider of an online health insurance network
Operator of PPO using data analysis and preventive care to improve health insurance
Provider of an online life insurance and general insurance comparison portal
Provider of cloud-based self-insurance platform
Provider of a web-based service platform to handle insurance contracts
Partners with health systems and care partners to provide health plans
Mobile application using data and analytics to make roads safer by making drivers better
Health insurance provider aiming to improve patient care with personalized plans
Provider of pay-per-mile car insurance
Provider of cloud-based SaaS for HR and benefits management
Round of financing in Q4 2018
12
$2,851
$5,266$7,444
$18,547
$5,052 $5,559
$8,693
2012 2013 2014 2015 2016 2017 2018
Notes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 12/31/18.
M&A activity in ’18 was bolstered by Carlyle’s $6.7Bn acquisition of Sedgwick; discounting this transaction, ’18 M&A volume lagged behind ’15-’17 levels
HEALTHY M&A DEAL ACTIVITY
Selected Major InsurTech M&A Transactions
71
88
73
48
58
85
67
= Number of Transactions
= M&A Volume ($USD MM)
Acquirer logo on top
$1.3Bn $155MM$1.4Bn$8.7Bn$2.4Bn$1.8Bn
$553MM $1.1Bn $400MM $760MM $174MM
$322MM
$2.5Bn
$919MM
$490MM
Undisclosed
$160MM Undisclosed
$6.7Bn
13
$784
$1,381
$426
$2,967
$225$500 $689 $579
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Ann. Date Buyer Target
Transaction Value
Segment / Value Chain
12/3 $87
11/27 NA
11/21 NA
11/13 NA
11/5 NA
10/25 NA
10/22 $122
10/17 NA
10/17 NA
10/4 $370
Notes:Source: CB Insights, Pitchbook. CapIq. GCA Deal Database.Market data as of 12/31/18.(1) Q4-17 includes Assurant’s $2.5Bn acquisition of Warranty Group.(2) Q3-18 includes Carlyle’s $6.7Bn acquisition of Sedgwick Claims Management.
Q4 volume lagged behind Q3 levels, even discounting for the Carlyle / Sedgwick transaction
INSURTECH DEAL DASHBOARD – M&A ACTIVITY
Quarterly M&A Activity ($MM)
19
24
25
20 21
15
$58.8 $32.7 $55.3 $21.3 $156.2 $10.7 $33.3
Select Q4 2018 M&A Transactions ($MM)
$369.5
LTM M&A volume:
$8.7Bn across 73 deals
P&C Life Health Distribution & CustomerEngagement
Products, Pricing & Underwriting
Data & AnalyticsPolicy Admin, Claims & Back Office
Insurance Segment Insurance Value Chain
Average Deal Size
(1) (2)
$7,389(2)
20
17
GCA Transaction
14
(25%)
(5%)
15%
35%
55%
75%
95%
115%
135%
Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18
Notes:Source: CapIq.Revenue growth and EBITDA margins shown are median values for comp group. Market data as of 12/31/18.
Selected InsurTech subsectors and key operating stats
INSURTECH PUBLIC COMPANY VALUATION
LTM Share Price Performance
Public InsurTech Ecosystem
Benefits Admin. / Payroll Brokerage Online DistributionData & Analytics IT & BPO ServicesInsurance Software
LTM Share Price
Performance
11%
Benefits Admin. / Payroll
3%
Brokerage
5%
Data & Analytics
37%
IT & BPO Services
(4%)
Insurance Software
141%
Online Distribution
11%
3%
141%
5%
37%
(4%)
15
5.1x
4.2x
3.1x2.8x
2.1x 2.0x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
Data & Analytics BenefitsAdmin./Payroll
Brokerage InsuranceSoftware
OnlineDistribution
IT & BPOServices
26.3x
16.3x 16.2x15.3x
13.9x12.4x
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
InsuranceSoftware
OnlineDistribution
BenefitsAdmin./Payroll
Data &Analytics
Brokerage IT & BPOServices
Notes:Source: CapIq.Revenue growth and EBITDA margins shown are median values for comp group.Market data as of 12/31/18.
Selected InsurTech subsectors and key operating stats
INSURTECH PUBLIC COMPANY VALUATION
Enterprise Value / 2018E Revenue
Public InsurTech Ecosystem
Enterprise Value / 2018E EBITDA
2019E Rev. / 2019E
EBITDA Multiple
4.0x / 15.2x
Benefits Admin. / Payroll
2.9x / 12.4x
Brokerage
5.0x / 13.8x
Data & Analytics
1.9x / 10.7x
IT & BPO Services
1.9x / 10.4x
Online Distribution
2.4x / 18.7x
Insurance Software
16
SECTION II:
EMERGING THEMES ACROSS INSURANCE
CATEGORIES
17
INSURTECH LANDSCAPE
DISCLAIMER: This is a representative list and may not include all relevant companies. If your company is not on the list and would like to be added for future publications, kindly shoot us a note at [email protected] and we would be happy to consider.
` ` `
` `
`
`Peer-to-Peer (P2P)
`Innovative & Specialty Insurance
Benefits Administration & Payroll Policy Management Tools & Software Claims Management Tools & Software
Insurance Data & Analytics IoT & Telematics: Auto`IoT & Telematics: Home
IoT & Telematics: Health
`Health Insurance
`Carrier Affiliated
Customer Origination
Mobile
`Online Distribution & Comparison `Sales, Marketing & Engagement
INSURANCE VALUE CHAIN:
Policy Admin,Claims &Back Office
InnovativeProducts, Pricing & Underwriting
Distribution & Customer Engagement
Data &Analytics
18
Offers on-demand personal item insurance
Home renting/ownership is driving technology innovation across a variety of insurance categories
INNOVATION ACROSS INSURANCE CATEGORIES
Home and Renters Title
Auto
Provides lease guarantor services for renters through an online portal
HealthSmall Commercial (SMB)
Specialty
Selected Insurance Categories and
Representative Companies
The Home is the
center driving
multiple insurance
use cases
Operates an online business insurance agency to connect business owners with industry specialists
Offers auto insurance quotes on your mobile device with a picture of your license
Provides a real estate transaction platform to handle title, escrow, and closing
Operates a healthcare platform to help compare and choose health plans
Life
Connects consumers to life insurance products from major insurers
19
41%
59%95%
5%
$17.6
$8.0$6.5
$4.7 $4.6 $3.5 $3.3 $3.0 $2.8 $1.6
State Farm Allstate libertyMutual
USAA FarmersInsurance
Travelers Nationwide AmericanFamily
Chubb Erie
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
HOME AND RENTERS
Disruptors
Market Overview
» Homeowners insurance is a ~$75Bn premium market
» Renters / condo insurance is a ~$5Bn premium market
– ~60% of renters are uninsured
– ~43% of millennials are renters
2017 Top Home Insurers
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Emerging Themes
Ho
meo
wn
ers
Ren
tersInsured
Uninsured
Provides lease guarantor services for renters through an online portal
Allows consumers to meet requirements of security deposits and other home buying / renting commitments
Partners with A-rated carriers to provide home insurance quotes in ~60 seconds
Provides an online portal to connect consumers and mortgage lenders as well as compare insurance quotes
Disruptors
Offers on-demand pay-per-use rental insurance coverage
Legacy Players
Digital platform simplifies mortgage lending; recently launched a home insurance offering
Integrates directly with lenders and insurance carriers, enabling homeowners to analyze property data
Top 10 = $56Bn in Premiums
Digital insurance bundling
» As home buying goes digital, mobile homeowners / title insurance and mortgage solutions will become the norm
» Digitally fluent home buyers will expect a connected, seamless insurance and mortgage experience
Geospatial analytics
» Advances in machine learning combined with cheaper aerial imagery have created a unique cost-saving opportunity in property insurance
» Providers are using geospatial analytics to extract data on property features to inform policy pricing
Millennial opportunity
» 31% of millennials say that the process of buying home and renters insurance is too complicated
» 33% of millennials say it has never occurred to them to buy renters insurance
Leverages geospatial imagery to enable insurance carriers to access property data and analytics
Key Stats% Insured in Homeowners vs. Renters
20
13%
87%
$10.3
$12.0$12.9
$13.9 $14.0
2014 2015 2016 2017 2018P
58%
10%7%
Millenial Baby Boomer Silent Generation
TITLE
Disruptors
Market Overview
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
» Title insurance represents a $14Bn+ market opportunity
» Traditional relationships between local mortgage lenders and title agents dominate the title insurance market, leading to fragmentation and lack of widespread adoption of a single carrier
Title Insurance Market Size
Emerging Themes
Disruptors
Legacy Players
Market Share Analysis
» Millennial entrance into the housing market poses the largest threat to the traditional title insurance model, as they will expect digital and tech-enabled real estate solutions
99%
89%
77%
Millenial Baby Boomer Silent Generation
% Who Used Internet in Home Search
% Who Used Mobile in Home Search
Millennial Silent GenerationOlder Boomers
Developer of a cloud-based real estate transaction management software
Operates a predictive analytics platform to determine risk and severity of title defects
Provides a real estate transaction platform to handle title, escrow, and closing
Key Stats
Millennials entering the
housing market
Digitization of the home buying process
Market share owned by: Other Providers (NAT, TRG, WFG, Westcor)
» Digitization of the home buying process will lead to digitization and consolidation of the title insurance market
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
21
$207 $218 $230 $247 $267
2013 2014 2015 2016 2017
$41.8
$29.6$22.8 $21.4
$13.2 $11.6 $10.4 $7.3 $4.4 $4.4
State Farm BerkshireHathwaay
Progressive Allstate USAA LibertyMutual
FarmersInsuranceGroup of
Companies
Nationwide Travelers AmericanFamily
AUTO
Disruptors
Market Overview
» Personal auto insurance is a ~$260Bn+ premium market annually
» Auto insurance accounts for 40%+ of the broader $640Bn P&C market
2017 Top Private Passenger Auto Insurers
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Emerging Themes
Offers auto insurance quotes on your mobile device with a picture of your license
Provider of pay-per-mile car insurance platform
Gives drivers customized quotes based on actual driving behaviors
Offers affordable car insurance by eliminating the traditional broker model
» Data penetration remains low in auto insurance number of connected drivers in North America is ~5%
» Opportunity to use mobile apps to track driver behavior
» Proliferation of the sharing economy with the likes of Uber, Airbnb, and Getaround is driving the need for innovative insurance products
» Increasingly, the use of software and smartphone cameras help insurers automate claims for vehicles damaged in accidents
» Allstate has phased out 900+ drive-in inspection stations where customers could previously take a damaged car for assessment
Disruptors
Legacy Players
Provider of virtual claims technology to the auto insurance market
Key StatsPersonal Auto Insurance Market Size
Top 10 = $167Bn in Premiums
Usage-based auto insurance
Virtual claims
Provides auto insurance that lets you pick the people you want included in your insurance pool
Offers car insurance plans for young and learning drivers
Pay as you go car insurance that can be paid by the hour, day, week, or month
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Provider of an online insurance marketplace to compare rates
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
22
Uses data and machine intelligence to give customers tips and insights regarding health insurance policies and recommendations based on their needs
Data-driven patient care
$52.2
$30.1
$17.8 $15.0$7.6 $5.9 $4.0 $3.8 $2.7 $2.0
$745 $824 $910 $974 $1,030
2013 2014 2015 2016 2017
HEALTH
Disruptors
Market Overview
» Health insurance is a ~$1Tn+ premium market annually
» Comparison platforms have taken off due to their ability to allow consumers to reduce costs next step is customizable, tailored supplemental plans that can be processed and purchased in minutes
Health Insurance Market Size
2017 Top Health Insurers
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Emerging Themes
Legacy Players
Disruptors
Top 10 = $141Bn in Premiums
Wearables
Remote healthcare
» Innovations are emerging for doctors and hospitals to implement real-time patient monitoring
» Insurers have expressed interest in using the same data to evaluate health risk
» Insurers increasingly harness new technologies in genome sequencing and genetic data collection to determine potential risks and price policies accordingly
» Communication between doctors and patients will increasingly become digitized
» Remote diagnoses with artificial intelligence eventually replacing non-urgent healthcare visits
Key Stats
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Partners with health systems and care partners to provide low cost, customizable health plans
Operates a platform intended to help users research prices on doctors, hospitals, health insurance plans, dentists and medical procedures
Operates health insurance portal and comparison site, offering a variety of health insurance plans
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
23
$771 $777
$815 $824$848
2013 2014 2015 2016 2017
$86.6
$29.6$22.8 $21.4
$13.2 $11.6 $10.4 $7.3 $4.4 $4.4
LIFE
Disruptors
Market Overview
» Life Insurance is a ~$850Bn premium market annually
» Top 10 Insurers account for ~25% of the market share
2017 Top Life Insurers
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Emerging Themes
Originates simplified life insurance products through its online portal for Vantis Life
Operates a platform designed to compare free quotes from top life insurers
Provides on-demand life insurance platform using a proprietary algorithmic underwriting engine
Disruptors
Legacy Players
Provides a platform to help compare quotes for a variety of life insurance products
Key StatsLife Insurance Market Size
Top 10 = $212Bn in Premiums
» Carriers are partnering with wellness companies to provide policyholders with discounts and perks for meeting exercise targets
» Companies focused on wearables, sensors, and analytics around consumer data have become central to the life insurance landscape
Interactive life
insurance
» Policyholders often fail to review and update their life insurance policies to account for major events such as getting married, having children or changing jobs
» Disruptors are focused on building products to help customers better navigate the life purchasing process and make effortless policy adjustments
Customer centric
products
Instant insurance platform streamlines life insurance process by eliminating the commissioned sales agents
Scores users on current health and lifestyle to help lower insurance premiums
Offers product guides and resources, to give consumers better knowledge about life and health insurance products
Dir
ect
Wri
tten
P
rem
ium
s ($
Bn
)
Connects consumers to life insurance products from major insurers
Provides platform designed to manage relationships between life insurers, agents, policyholders
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
24
SMALL COMMERCIAL (SMB)
Disruptors
Market Overview Emerging Themes
Disruptors
Legacy Players
Offers a mobile insurance marketplace for freelancers and the gig economy
Operates an online business insurance agency to connect business owners with industry specialists
Provides a platform for general and professional liability insurance
Commercial Insurance Market Share
75%
33%
Millenial owned
Regular
» 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 insurance opportunity for the gig economy
» 33% of US small businesses would prefer purchasing commercial insurance online
» For millennial small business owners, this number climbs to 75%
5.5% 5.5%5.1%
4.2% 4.2%
3.3%2.8% 2.7% 2.6%
2.1%
Chubb Travelers Liberty AIG Zurichinsurance
group
CNAsFinancial
Corp
Berkshirehathaway
Nationwidemutualgroup
HartfordFinancialServices
Tokio MarineGroup
Mar
ket
Shar
e o
f To
tal
Dir
ect
Pre
miu
ms
» Small commercial insurance is a $100Bn market
» Highly fragmented market no single insurer has more than 5-6%market share
» 24% of small businesses purchased their most recent insurance online
Key Stats
» 25%+ of small commercial insurance premiums are expected to be digitally underwritten by 2020
Digital policies
Millennials becoming
small business owners Online SMB Insurance Purchasing
Overall SMB Market
Millennial SMB Market
Source: CB Insights, NAIC, Insurance Information Institute, NAR.
25Source: Company Websites, Crunchbase, Pitchbook.
SPECIALTY INSURANCE
Personal Item Peer-To-Peer Travelers
» Offers on-demand single item insurance
» Allows customers to insure everyday tech, sports equipment, music equipment, and more, instantly, from their mobile device
» Offers insurance quotes on personal items just by sending in a picture
» Customers can purchase auto, homeowners, jewelry, phone or pet insurance
» Customers are able to insure their belongings based on pools made up of individuals with similar interests
» Takes on no underwriting risk – purely peer driven
» Offers real-time travel and medical insurance
» Instant claims payouts go straight to a customer’s TravelCard debit card
» Provides daily health/travel insurance on the go
» Fully mobile, designed to offer insurance for travelers doing activities like skiing and diving
» Members can seek out groups with similar interests who want similar products to be covered, e.g., pet insurance
» Claims are paid out from peer groups with like interests
26
SECTION III:
APPENDIX
27Notes: Source: CapIq. Pitchbook.Multiples based on CapIq Consensus Estimates. Multiples <0 and >100 considered NM.
SELECTED PUBLIC COMPANY DETAIL($MM, except per share data)
Stock Operating Metrics Trading Metrics
Price Equity Enterprise Revenue Growth EBITDA Margin EV / Revenue EV / EBITDA
Company 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 $2,767 (13%) (55%) 15% 3.5x 8.0x 23.7x NM
Median 2% 4% 34% 5.1x 5.0x 15.3x 13.8x
28Notes: Source: CapIq. Pitchbook.Multiples based on CapIq Consensus Estimates. Multiples <0 and >100 considered NM.
SELECTED PUBLIC COMPANY DETAIL($MM, except per share data)
Stock Operating Metrics Trading Metrics
Price Equity Enterprise Revenue Growth EBITDA Margin EV / Revenue EV / EBITDA
Company 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
29GCA operates as GCA in America and Asia, and GCA Altium in Europe.
Global investment bank that provides strategic M&A and capital markets advisory services to growth companies and market leaders
GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK
NEW YORK
ZURICH
MILAN
FRANKFURT
MUNICH
TEL AVIVSAN FRANCISCO
LONDON
MANCHESTER
MUMBAI
OSAKA
SHANGHAI
SINGAPORE
TOKYO
NEW DELHI
NAGOYA
HO CHI MINH CITY
TAIPEI
Globally integrated
platform with 19
offices across
America, Asia and
Europe
Geographically balanced,
synergistic and complementary
sector focus areas
across the firm
Strong in key
growth sectors
such as Technology and Industrials
Strong cross-border
capabilities and
deal flow: ~35% of
all transactions are
cross-border
400+professionals
350+ deals closed in the last 3 years
PARIS
30Notes:The above transactions represent a compilation of deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on.
Payments
Insurance Technology
Payments Payments
Insurance TechnologyPayments Insurance TechnologyLiquidity Venues Financial SaaSInvestment Technology
Insurance Technology
Acquired by
Fairness Opinion to Clearent
Real Estate Tech Banking & Lending Tech
We Advised Vindicia
Acquired by
Insurance Technology
Financial Advisor
Growth Investment
Payments Payments
We Advised Principal
Acquired
Investment Technology
We Advised Risk International
Sold majority stake to
Insurance Technology
We Advised CHX
Acquired by
Insurance Technology
Acquired by
Financial Advisor
Growth Investment Strategic Investment
We Advised ControlExpert We Advised Edo
Acquired by
Sale of
Financial Advisor
to
We Advised Radius
Financing from
Sold
To
We Advised RGI Shareholders
We Advised Skyslope
Majority sale to
Acquired by
We Advised WorkMarket
Tender Offer for
Asahi Fire & MarineInsurance Co.
We Advised AsahiWe Advised BlackFin
Sold
To
We Advised Bexio
Acquired by
We Advised Liqid’s shareholder HQ Trust
Received an investment from
We Advised QuoteWizard
Acquired by
Selected FinTech experience
GCA OVERVIEW
We Advised Silver Investment Partners
Acquired
Payments
Preferred Financingfrom
We advised GOQii
Insurance Technology
Insurance Technology Transaction
Insurance TechnologyInsurance TechnologyPayments Investment Technology
Acquired by Preferred Stock Investmentfrom
Financial AdvisorWe Advised TSYS
Acquisition of
We Advised Blucora
Acquisition of
We Advised AWL
Acquired by
Real Estate Tech Real Estate Tech
We Advised Capsilon
Growth Investmentfrom
We Advised Commissions Inc
Property Tech
Acquired by
We advised ATTOM Data Solutions
