The Carlyle Group to Become Majority Investor in Sedgwick in $6.7B Transaction
Sedgwick, a global provider of technology-enabled risk, benefits and integrated business solutions, announced today that affiliates of funds managed by The Carlyle Group (NASDAQ: CG) have agreed to become the majority owner of Sedgwick in a transaction valued at approximately $6.7 billion. Current majority shareholder KKR will fully exit its position following the transaction. Funds managed by Stone Point Capital LLC and Caisse de dépôt et placement du Québec (CDPQ), together with Sedgwick management, will remain minority investors.
On an annual basis, Sedgwick handles more than 3.6 million claims and has fiduciary responsibility for claim payments totaling more than $19.5 billion.
The parties are working to close the deal later this year, subject to customary closing conditions, including regulatory approvals.
Equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund that focuses on buyout transactions in the U.S., and Carlyle Global Financial Services Partners III, L.P., a dedicated financial services buyout fund.
BofA Merrill Lynch served as financial advisor to Sedgwick, and Simpson Thacher & Bartlett LLP served as legal advisor. BofA Merrill Lynch, Morgan Stanley and KKR Capital Markets are expected to provide debt financing for the transaction. Morgan Stanley and Sandler O’Neill + Partners, L.P. served as financial advisors to Carlyle, and Wachtell, Lipton, Rosen & Katz served as legal advisor.
Next Insurance Rolls Out Commercial Auto Insurance
Next Insurance, a digital insurance carrier for small businesses, announced the launch of a new commercial auto insurance policy. Like all Next Insurance products, the offering is available entirely online, and the company has eliminated all extra fees. Small businesses can now purchase a commercial car insurance policy separately, or at a reduced price when bundled together with liability insurance. The addition of a commercial vehicle insurance policy to Next Insurance’s product lineup reflects the company’s vision to serve as the single, comprehensive insurance provider for small businesses and entrepreneurs.
The policies can be bundled together and purchased entirely online, advancing Next Insurance’s model of providing simple, affordable, and tailored insurance for small businesses.
Next Insurance Commercial Auto Insurance policies offer the following:
● Business owners can select the level of protection that’s right for them according to their desired level of risk and budget.
● Business owners can also select from several limits and choose whether to include protection for their own vehicle (when used for business purposes) on top of the liability auto coverage required by law.
● Next Insurance policies offer coverage for up to four different vehicles and eight drivers.
● The company has launched commercial automotive insurance in six states (Arizona, Colorado, Indiana, Illinois, Minnesota, and Ohio) to date, and will soon be in all 50 states.
The launch of the commercial automotive insurance offering comes on the heels of Next Insurance’s recent Series B Funding Round, in which it raised $83 million, bringing its total funding to $131 million in two years. In May 2018, Next Insurance announced its newly-acquired status as a national insurance carrier.
PCS to Deliver U.S. County-Level Estimates
Property Claim Services, a Verisk business,announced a new level of granularity for U.S. property-catastrophe insured loss estimate data. In the first quarter of 2019, PCS will provide county-level industry insured loss estimates and claim counts for events with insured losses of at least US$1 billion-across all states and perils. PCS has worked closely with insurers in the United States and risk bearers around the world to develop this new view of U.S. catastrophe losses and launch a product enhancement that directly meets the industry’s needs.
PCS has already received county-level projected ultimate loss data from a wide range of insurers, with additional data continuing to be submitted. Initial testing has focused on Texas, with a range of perils causing events of greater than US$1 billion. However, PCS will complete further testing across the United States before county-level industry loss estimates are available for access. Historical events available in the database will include the three large hurricanes from the second half of 2017.
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