Google’s investment in Applied is a vote of confidence for the longevity of the broker channel, the company said.
The company shrugged off claims that brokers were struggling in the face of a greater move toward insurers selling direct.
The tech giant’s investment arm, Capital G, ploughed a “nine figure” sum into broker software provider Applied Systems last week.
Jesse Wedler, principal at Capital G, said the company wouldn’t have invested in Applied had it not been confident of the long-term success of the broker model.
“Our investment is only going to do well if the independent agents channel does well,” he said.
“We have a long term time horizon. We are voting with our feet here, and putting a dollar behind it. We are believers in the independent agency channel.”
Reid French, CEO of Applied Systems, said there was no data to back up claims that broker distribution was in decline as a result of a greater number of insurers selling direct.
“The independent agency channel is doing well, and all the numbers support that,” he said. “There are more agencies and they are more profitable than they were ten years ago.”
The investment in Applied is expected to be long term, rather than a short term deal, Wedler said.
“It is a long-term investment,” he added. “A lot of private equity firms have what they call a fund life, where they try to exit the investment in three to five years. We don’t have a fund life. We like to have investments for over 10 years.”
Sounded a good plan, Exec Team Visit to our wonderful claims team in Morecambe, bit of a ‘Back to the Floor’ & dish out some Easter Eggs. Lovely. So how did I end up with these & having to wear them home on the train? Thanks @helenidle @AXAUK @AXA_Broker #BunnyEars pic.twitter.com/cNd80WnRPd— David Williams (@AXADavidW) April 17, 2019
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