Acrisure, one of the largest insurance brokers in the world, recently announced the closing of two transactions representing a significant capital raise of US$3.4 billion, after the fast-growing firm drew investor attention through its tech-enabled value proposition and unique distribution platform.
BDT Capital Partners, a merchant bank that provides family and founder-led businesses with long-term, differentiated capital, led a US$3 billion investment into Acrisure’s Senior Preferred Stock, which aligned the capital structure to support the firm’s long-term objectives. The remaining US$454 million of new capital in Junior Preferred Stock was raised by a consortium of investors.
“These transactions are a clear reflection of how the market is valuing both the strength of our existing insurance brokerage business and, importantly, our vision for accelerating our technology initiatives going forward,” said Greg Williams (pictured), co-founder, president and CEO of Acrisure. “These investments enable us to pursue strategic initiatives with aligned capital that will provide greater value for all shareholders.”
Acrisure is on a multi-year journey to “tech enable” every facet of its business. The brokerage has invested heavily in data and analytics, artificial intelligence (AI) and machine learning capabilities to enhance its global distribution power and accelerate its growth in the insurance brokerage industry and into adjacent opportunities.
In 2020, Acrisure made a significant leap in its quest to become a nimble, data-rich and digitally oriented brokerage by acquiring insurtech Tulco LLC’s insurance practice. The acquisition followed a successful year-long partnership during which the two firms formed Altway Insurance, a fully-AI backed brokerage focused initially on individual health benefits. Since its launch, Altway has seen 24 consecutive weeks of 10% or greater week-over-week growth. That is all the proof that Williams needed to acquire Tulco with the aim of rolling out its technology infrastructure across the entire Acrisure business.
“We’ve got over 2,000 sales professionals around the world. Our goal is to help them be more efficient and effective at what they do,” Williams told Insurance Business. “We’ve spent a lot of time and energy investing in our technology platform because we believe that when you’ve got the best of human and machine working together, that’s the winning formula. Of course, there is a digital fulfillment component to it as well. There are opportunities for us to use technology to identify clients and prospects, and to transact business digitally. But our biggest opportunity is to help our growing sales force be more efficient and more productive.”
Acrisure is majority-owned by employees and has locations across six countries, providing commercial, property and casualty, life and employee benefits solutions. The firm has grown from US$650 million in annual revenue in 2017 to more than US$2 billion today, a dramatic growth spurt helped along by more than 500 acquisitions. Just last year, despite complications caused by the COVID-19 pandemic, the brokerage acquired 110 insurance agencies, while also reducing its net debt leverage.
“M&A has always been a part of the Acrisure playbook,” said Williams. “Our model is based around a network of very strong agency partners, and as we continue to tell a compelling story about our transformation, that’s really resonating with entrepreneurial business leaders around the world. We do have plans to grow internationally [approximately 95% of Acrisure’s business is in North America], and we believe that what we can bring to the table in terms of our tech-enabled value proposition resonates in other parts of the world just as much as it does in North America.”
Acrisure’s recent capital raise of US$3.4 billion will support its growth and expansion via innovation and its ongoing M&A strategy. It has also enabled the firm to expand beyond the insurance brokerage industry. On Tuesday, March 30, Acrisure announced the launch of a new Asset Management division that will further diversify its portfolio and unlock new opportunities for clients and advisors in financial services.
“This expansion into asset management is the first step in driving our innovative, tech-enabled solutions beyond our core insurance service,” said Williams. “Acrisure is leveraging our financial strength, industry expertise and global distribution power with the integration of best-in-class AI to tech-enable and expand the traditional insurance model.”