Financial Technology, Data, and Analytics

Dear Clients and Friends,

The report found below gives our sense of the current m&a trends and deals in the Enterprise Data and Analytics sector that we follow and sometimes lead. 

A few months ago McKinsey came out with a study on the impact of AI on the insurance industry. It’s worth a read. It’s a slow evolutionary process according to McKinsey –with a focus on four core technology trends: the explosion of data from connected devices; increased prevalence of robotics; open source and data ecosystems; and advances in cognitive technologies.

While we see the core drivers as slightly different from those noted in the McKinsey study we agree that technology is changing the insurance business rapidly – and permanently.

Insurance is complicated – with a myriad of players (for example, consumers, brokers, insurers, re-insurers, on one side; regulators (federal, state, local etc.) on another side; and service providers on a third side (doctors, hospitals and auto repair shops). It also currently requires a labor intensive – and paper intensive – process of risk assessment (and periodic reassessment); claims management and payment. 

There is broad agreement that technology should be able to increase efficiency in the various processes, drive revenue, and lower costs, all while improving customer experience. And there are a host of technologies on offer. For us the three biggest tech trends to watch in Insurance tech now are Big Data Analytics, AI and Blockchain.

Advanced analytics are already allowing some insurers to make use of terabytes of new data derived from networked home systems, “telematics” recording devices and even social media to construct so-called “big data” models, with the promise of breakthroughs in everything from fraud detection to pricing and underwriting, reconciliation, property assessment, claims verification, claims management, receiving customer insights, and more effective marketing and customer service.

When these analytics are combined with AI (machine learning) the result can be a level of intelligent automation (think intelligent chatbots for customer service) and predictive analytics at a level not previously seen.

And then there is Blockchain – because without a way to digitize and link all that data that is now in paper form – or in a host of unconnected disparate databases the rest will never work. 

We are in the thick of all this transformation and working with companies who are continually moving the ball forward.  As you will see from the enclosed report, m&a values and trends in this industry remain strong.

A few of the more interesting m&a transactions are reflected in the following report including:

• BlackRock (NYSE:BLK) agreed to acquire eFront for $1.3bn.
• MiningLamp (Beijing, China) raised ¥2,000mm (~$297mm) in a Series D funding round led by Tencent Holdings,
• Appen Limited (ASX:APX) agreed to acquire Figure Eight for $300mm, valuing the company at a 10.3x implied LTM Revenue,
• SurveyMonkey (San Mateo, CA) agreed to acquire Usabilla for $80mm,
• Marlin & Associates’ client BidFX (London, UK), a subsidiary of TradingScreen raised $25mm from the Singapore Exchange Limited (SGX). Please click here for details.