The ABD M&A Advisory Practice announced today a newly crafted insurance and employee benefits offering, addressing the needs of an entire portfolio of private equity backed companies. Led by Senior Vice President, Josh Warren, M&A Advisory Practice Leader, the offering will use a multi-disciplinary approach focused on coverage consistency, cost containment, program efficiency, and enhanced services.
“Many private equity investors were willing to engage in discussions about portfolio programs in the wake of the 2008 recession,” said Warren. “As deal flow slowed, they looked for opportunities to create efficiency across their portfolio and have a better understanding about what is purchased at their portfolio companies. Insurance and employee benefits aggregation strategies came up often in those discussions.”
“In 2008, there were a lot of discussions but very few implementations,” Warren continued. “There has been a lot of positive change in the insurance marketplace since then. With widespread application of Reps & Warranties insurance, insurers have a better understanding of the inner workings of private equity firms, and there are tailored products and a better process to meet their needs.”
ABD’s approach enhances the due diligence offering, provides the most comprehensive coverage available regardless of the size of the company, and has full portability to new ownership.
Chris Cordes, Executive Vice President and Employee Benefits Practice Leader added, “Our Employee Benefits offering was designed to exceed the expectations of Silicon Valley technology companies. We provide a completely different experience when we apply our standards and data driven consulting to a portfolio company’s day-to-day needs.”
“The timing is perfect to establish a portfolio-wide approach,” Cordes continued. “All signs are pointing towards 2021 being a very unstable claims year for Medical insurers. An unintended consequence of COVID-19 is that many people have put off medical procedures and preventive health because they are uncomfortable going into clinics and hospitals. We believe that 2021 will result in higher than average costs to Medical insurers. Implementing a portfolio program in 2020/2021 will best position portfolio companies to contain costs when Medical insurers raise rates to recoup their losses.”
“Replacing the broker at the existing portfolio companies is by far the biggest impediment to establishing a portfolio program,” added Rod Sockolov, EVP and Property & Casualty Practice Leader. “ABD has crafted a solution that allows the existing portfolio companies to maintain their broker relationships while still getting access to ABD crafted policy terms and conditions. This makes it easier to get the program up and running so we can give private equity investors the consistency and protection that they desire while limiting the amount of political capital that they have to expend.”
ABD is a full-service brokerage, crafting innovative solutions to help address risk for clients of varying growth, sizes, stages, and industries across the globe. Our philosophy makes it possible to view the relationship in totality and not in insurance and employee benefits silos. This gives us the flexibility to charge one fee for our services and include incentive-based compensation that aligns our interest.
“This is the perfect time for private equity investors to focus on this offering,” Warren continued. “There is a slowdown in deal flow, a hardening insurance market, the unknown effects of COVID-19, and recent hard lessons learned regarding how coverage applies when a loss occurs. Our ability to move quickly and implement a program with limited disruption sets us apart in the market.”
ABD Insurance and Financial Services provides risk management, insurance brokerage, human resources, and retirement consulting services. Our advisors offer guidance and craft innovative solutions to help address risk for clients of varying sizes, growth stages, and industries.
Headquartered in San Mateo, ABD has offices throughout California, Washington, Illinois, and New York and is home to over 350 employees who serve clients across the United States and globally. To learn more, visit: www.theABDteam.com.
Senior Vice President, M&A Advisory Practice Leader