In the latest episode of Main voices on The insurer TVPower also revealed that One80, which was founded in 2020 when it had just 60 associates and around $14 million in revenue, will see its workforce surpass 2,000 by the end of the year.
The firm is built around five core pillars: Contract Binding, Wholesale Binding, Program Activity, Specialty Practice and Affinity Practice.
And speaking in the Lloyd’s building, Power highlighted the close links with London as a specialist insurance market.
“Speciality is really at the heart of our business model. We felt at the start of One80 that we didn’t want to build a generalist brokerage operation. We wanted one that was underwriting-driven, specialty-driven, and value-creating based on the deep level of specialization that each of the acquisitions and each of the divisions brought to the table,” he explained.
Power said London is a market driven by specialty, specialization and innovation.
“It’s the cradle of innovation for our industry,” suggested the former AIG and Lexington executive.
One80 leverages these strengths in the London market through around 20 hedging arrangements with Lloyd’s, as well as through business placed on an individual risk basis in the London market.
Outsized M&A valuations ‘are not the new normal’
One80 has been an active acquirer of businesses as it has grown rapidly over the past two years.
But Power said oversized Ebitda multiples for certain transactions should not be seen as the new norm in the market. Although there may be some transactions where the multiples exceed the average, they should be considered exceptional.
“I think there’s a tendency for industry watchers to look at valuations, especially outsized valuations, and think that’s the new normal. In fact, it is not.
“Most of the trades we’re seeing are in the 8x to 11x range – that’s probably the sweet spot – which I think is pretty reasonable given today’s market. So the trend of looking at these mega deals with very, very large multiples I think is a bit of a false signal,” Power added.
The executive also stressed the importance of culture in M&A deals, especially for a company that is “very selective” in the deals it pursues.
“One of the things that I note is that probably the last six deals we’ve signed, we weren’t the highest bidder. So why are we winning? We’re winning on culture,” he said. he commented.
He said One80 places employees at the center of its business, which he says is an essential approach for the business to thrive.
“If you support your employees and create an environment where they love coming to work, they love their jobs and there’s a great sense of security and value in what they do, they’ll bring it every day. They will do a great job for our customers,” he added.
During this interview, Power also discusses the following points:
- One80 Achievements and Growth Goals
- The Role of Specialized and Specialized Solutions at One80
- One80’s proposition versus PE-backed consolidators and aggregators
- The current M&A market