Utilizing an insurance experienced advisor for interim managementArticle added by Andrew Barile on September 28, 2009
Andrew Barile

Andrew Barile


Joined: August 21, 2010

The private equity firm looking to make a strategic investment in the insurance industry should look to an experienced insurance industry executive to provide an interim management role. The executive looking at retail insurance brokers, excess and surplus lines brokers, wholesalers and managing general agents knows the space and what makes a success operating platform.

Formulating the checklist for a successful due diligence event should include the following:
  • Identifying the core strengths and weaknesses
  • Understanding the competition
  • Knowing which changes should be made
  • Accessing their business plan and operational goals
  • Considering if you would invest in this firm
  • Deciding if this space provide a significant opportunity for a "roll-up" strategy
  • Providing two to three significant references
  • Analyzing the history of organization/marketing plan
Private equity firms, hedge funds, and funds within funds all have strategies for making investments in the insurance industry. Some funds with billions of dollars under management use "EBITA" as the criteria.
  • Under $10 million in EBITA
  • Between $50 to $75 million in EBITA
  • Over $75 million in EBITA
Providing much-needed capital to the insurance distribution space and seeking "roll-up" opportunities when the insurance market pricing should begin to increase always makes for a successful strategic investment in the insurance industry. Use the experienced advisor for interim management.
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