HGGC opens up on PCF Insurance acquisition

HGGC, PCF | May 18, 2020

  • HGGC recently completed its acquisition of PCF Insurance, a full-service insurance brokerage based in Woodland Hills, California.

  • Acquisitions have been at the heart of PCF’s growth over the past two years. Since 2018, the retail brokerage has executed an aggressive M&A strategy.

  • In addition to facilitating inorganic growth via M&A, HGGC will also support PCF in building out its platform, investing in new technology.


HGGC, a middle market private equity firm, recently completed its acquisition of PCF Insurance, a full-service insurance brokerage based in Woodland Hills, California.

Founded in 1987, PCF is a growing retail insurance brokerage with a diverse offering of commercial lines, personal lines, and employee benefits products. It currently has over 400 employees across the US and serves more than 40,000 customers. Following the deal, PCF’s current management, employee owners, and existing investor BHMS Investments have retained minority stakes in the business.

New owner HGGC is no stranger to the insurance services world. Two of its key insurance services portfolio companies include US-based Integrity Marketing Group and UK-based Davies Group. Since HGGC’s investment into Integrity in July 2016, the firm has grown to be among the leading distributors of senior life and health products in the US, placing $2.5 billion in premiums and recording 8x earnings growth. It’s a similar success story with Davies Group. The UK-based provider of tech-enabled insurance services has completed 17 acquisitions and quintupled revenues in three years with HGGC backing.
 

Read More: CyberCube launches “Broking Manager” a SaaS application designed specifically for insurance brokers


We believe the key to success in the insurance services space is strong leadership and smart M&A. We’re excited to build on our successful track record with Davies and Integrity, When we got to know PCF as a business, and we got to know Peter Foy [PCF founder, CEO and chairman] and the team, two things were very clear. One is that PCF was thriving in a market that we really like. The retail brokerage market is attractive because there’s highly recurring revenue, high retention of that revenue, nice earnings characteristics, stable and steady cash flows, and opportunities to grow both organically and inorganically.

- John Block, Partner at HGGC.


“PCF demonstrates those qualities. Peter Foy has done a fantastic job both managing organic growth and also leading 18 acquisitions over the past two years. He partners with BHMS Investments to meaningfully scale the business and build out what is now a national platform. So, they have a strong business today, a nice financial profile, a diversified platform nationally, a nice mix of commercial lines, personal lines and employee benefits, and a good mix of carrier partners. Those things combined make PCF a really strong platform to work with, and we think there’s a big opportunity to continue to invest in the team, continue to build out the corporate infrastructure, and continue to focus on organic and inorganic growth.”

Acquisitions have been at the heart of PCF���s growth over the past two years. Since 2018, the retail brokerage has executed an aggressive M&A strategy by completing 18 add-ons and expanding outside of California into New York, Illinois, Nevada, Colorado, Arizona, Kansas, Kentucky, and Florida. Moving forwards, HGGC wants to position the business to be able to acquire 10 to 20 businesses every year, according to Block. He said that with the pipeline of opportunities in the marketplace, and the increasing footprint and presence of PCF, the brokerage will be “well positioned to achieve that goal”.
 

Read More: Just Auto Insurance propels pay-per-mile auto insurance product in Arizona


The prospect of further growth proved “exciting” for Foy. Commenting on the deal, the brokerage founder and CEO said: “We’re excited to partner with HGGC and leverage their experience and support during this next phase. I’m confident that, together, we will be able to continue to execute our strategy and accelerate our growth in this attractive market.”

In addition to facilitating inorganic growth via M&A, HGGC will also support PCF in building out its platform, investing in new technology, and continuing to grow organically by leveraging its strong producer base and blue-chip carrier relationships. Block explained: “We absolutely intend to invest in the platform, meaning we will build out the infrastructure of the business and invest in new technology, systems and processes to help optimize the business and continue to allow it to scale.


We see that across all of our business portfolios – the utilization of technology internally to help these businesses scale efficiently and effectively – and that will absolutely be the case at PCF. In addition to that, we will be looking at opportunities to help our agencies and help our businesses, PCF included, utilize technology better. We are big believers in giving our teams external-facing technology over time and enabling them to use the latest and greatest tools at their disposal in order to be as effective and productive as they can be.

- John Block, Partner at HGGC.


About HGGC

HGGC is a leading global private equity firm with over $4.3 billion in cumulative capital commitments and oversees portfolio companies that employ more than 65,000 employees globally. Over its history, HGGC has completed platform investments, add-on acquisitions, recapitalizations and liquidity events with an aggregate transaction value of over $25 billion.
 

About PCF Insurance

Founded as Peter C. Foy & Associates in 1987, PCF is a leading insurance brokerage firm dedicated to providing complete risk management solutions. PCF has a diverse offering of commercial lines, personal lines, and employee benefits products, with more than 40,000 customers across the country.

Spotlight

The Property and Casualty (P&C) insurance industry is being dramatically transformed by digital technologies that are shifting the customer relationship back to the carriers. Beyond working through third-party agents or brokers to purchase insurance policies, more customers are going directly to insurance carriers via their website and other digital channels. Driven by the convenience of online shopping, insurance companies are now expected to provide information that helps customers learn about policies, compare options and even complete an application from virtually any connected device, 24/7.

Spotlight

The Property and Casualty (P&C) insurance industry is being dramatically transformed by digital technologies that are shifting the customer relationship back to the carriers. Beyond working through third-party agents or brokers to purchase insurance policies, more customers are going directly to insurance carriers via their website and other digital channels. Driven by the convenience of online shopping, insurance companies are now expected to provide information that helps customers learn about policies, compare options and even complete an application from virtually any connected device, 24/7.

Related News

CORE INSURANCE, INSURANCE TECHNOLOGY

Sure Introduces Retrace for Online Insurance and Protection

Sure | March 14, 2023

Sure, a leader in insurance technology recently unveiled its latest product - Retrace. This innovative technology empowers online merchants to offer their customers embedded one-click insurance and protection. Retrace offers a suite of APIs, enabling online merchants to embed insurance and protection into various use cases such as e-commerce returns, travel insurance, and product warranty protection at any stage of the purchase process. With the help of Retrace, online retailers are able to grow their customer base by providing an improved customer experience. This results in higher levels of customer satisfaction and generates more brand advocates. Also, they have the ability to diversify their revenue streams while simultaneously increasing their top-line revenue. Sure is introducing its first e-commerce solution with the launch of Retrace. This innovative technology empowers online merchants to provide return shipping protection to their customers at the point of sale, covering the cost of returning goods. Retrace's embedded Return Shipping Protection is a revolutionary technology that streamlines the online shopping experience for merchants and consumers, reducing friction. Wayne Slavin, Co-Founder and CEO of Sure, stated, "Retrace is the latest offering of Sure's innovative technology to unlock the potential of digital insurance and protection through frictionless online customer experiences." He added, "Our technology reaches and engages customers wherever they are on their journey, and with Retrace, we are enabling online merchants to provide customers with embedded insurance and protection tools. We're starting with the first of its kind one-click return shipping protection but the sky's the limit, and we have set our sights on a variety of other products spanning travel insurance to warranty protection and beyond." (Source – Cision PR Newswire) About Sure Sure is a prominent insurtech company that powers some of the world's most recognized brands and carriers. Its enterprise SaaS infrastructure and embedded insurance programs drive the insurance industry forward, allowing it to reach its full potential in the digital age. Sure's customers use its unified system of APIs to streamline the entire insurance lifecycle, leading to enhanced customer experiences and efficient digital operations. Founded in 2015, the company is based in Santa Monica (California) and has offices worldwide.

Read More

CORE INSURANCE,WORKERS COMPENSATION

Inszone Insurance Services Announces Acquisition of Employers Choice Insurance

Inszone Insurance Services | January 06, 2023

Inszone Insurance Services, a leading national supplier of benefits, personal, and commercial lines insurance, has acquired Employers Choice Insurance Services Inc. As part of the acquisition, Employers Choice Insurance Services staff and the current site in Oceanside, CA, will be retained by Inszone Insurance Services. Employers Choice Insurance Services, founded in April 1998, has become the go-to firm for workers' compensation in Oceanside and the surrounding areas. Over the years, Employers Choice has successfully grown into one of California's premier commercial insurance agencies. Employers Choice Insurance specializes in workers' compensation and also provides general liability, group health, commercial auto, and payroll insurance to its commercial clients. About Inszone Founded in 2002 in Rancho Cordova, CA, Inszone Insurance Services has grown into one of the big players in the insurance sector with offices in California, Arizona, Colorado, Utah, Nevada, Missouri, Texas and Illinois, serving all the 50 states. With a customer-centric mentality, it focuses on the relationship between agents and customers, ensuring customer satisfaction above all else. Inszone Insurance Services is a full-service insurance agency that can handle both personal and commercial insurance needs. With experienced and expert insurance professionals' insights, it simplifies shopping strategies for customers, making an otherwise complex process simple and streamlined.

Read More

CORE INSURANCE, INSURANCE TECHNOLOGY

Socotra Focuses on European Expansion with Its Global Growth Strategy

Socotra | February 23, 2023

Socotra, an insurance solutions provider, has recently announced a vast market expansion in Europe, having the primary drive in the United Kingdom, France and DACH. This expansion is supported by API-driven cloud-first technology, accelerating demand generation and insurers’ speed-to-market at a low expanse. It has achieved strong growth in 2022 with about 75% customer growth, approximately 71% revenue increase and over 117% YoY increase in policies on SaaS managed platform. Its clients, like MS Amlin and AXA, are increasing significantly, and API-driven cloud-first technologies are required. These technologies would enhance product launches and flexibility and decrease IT expenditures. Its solution, Socotra Connected Core, offers insurers the authority and flexibility to launch any insurance product through any chosen distribution channel. Moreover, these products can efficiently be distributed to even local places around the world, adhering to the rules and the currency of that place with the details of date and address formats. Its other solution, Socotra App MarketPlace, provides instant access to the software and insurance data providers with a click-to-run experience for all its customers without additional cost. Founder and CEO of Socotra, Dan Woods, said, “Today, many insurers are profoundly impaired by legacy technologies, and it is our mission to make high-quality technology available to all insurers, everywhere.” He added, “We are greatly increasing our investments in Europe and hiring top talent on the ground. Our major push into the UK and European Union continues our commitment to helping insurers thrive around the world. Our first customer in Europe was in 2017, and since then we’ve made steady progress throughout Europe. We are seeing increasing demand for technologies like Socotra that are fast, flexible, cost-effective, and mature.” (Source – Business Wire) About Socotra Headquartered in San Francisco, California, Socotra, a software development company, has provided solutions for the insurance sector since 2014. Working with global insurers, it has modified their technology for innovative products and business growth. It gives insurers an advanced enterprise-grade core system for the rapid development and distribution of insurance products, enhancing their customer services. It accelerates operational speed and flexibility and provides more control to the insurer over their businesses. Its complete insurance solutions improve product development, customer experiences and cost-effectiveness for global insurers and insurtech MGAs.

Read More