BMS's Curry: Market excitement for service businesses the highest 'in a very long time'

By Isha Marathe

June 6 - (The Insurer) - Even in the absence of a robust initial public offering environment, there is a notable pickup in insurtech M&A activity that the investors don’t see tempering in 2025; still, creating specialization is key to attracting interested capital, said Josh Curry, managing director at BMS Group.

“The markets have not been more excited for service businesses in a very long time,” Curry said. "Service businesses like Aon, Marsh, Baldwin and others, they're trading at multiples in the 30s, 40s, 50s on their price to earnings ratio… (whereas) Google is trading in the high teens.”

“So when you think about investor sentiment for great businesses, a lot of the smart money is in insurance, and a lot of the smart money has stayed in insurance.”

Curry cited Acrisure’s recent $2.1 billion refinancing led by Bain, along with Hub reaching a $29 billion valuation with its latest raise as examples of interest from outside the insurance industry like T Rowe Price.

“I often think that people think about SaaS when they think about insurtech… (and) a lot of people don't recognize that agencies and MGAs are very much insurance technology firms, but they're offering a unique suite of products which are trading at a premium to SaaS companies,” Curry said.

While investors might be interested in insurance, Curry also said the insurtech business is a “diamond trade,” in that being unique is key to attracting capital.

“(Investors) are not thinking this is going to slow down,” he said. “But it’s not a universal feeling… if you're a specialist and you are exceptional at what you do, you will trade in this market at a premium.”

Looking ahead, Curry suspects that the industry has come to realize that carriers attempting to go direct-to-consumer with their products have generally been unsuccessful, notwithstanding some large companies like Geico and Progressive. This means "the agent is here to stay," and insurtechs that keep the agent in mind are likely to be more successful as they specialize around a certain offering, he said.

"I think oftentimes people will say (the) markets are tough, the markets are volatile, 'I'm not getting a lot of interest for my Series A,'" Curry said. "Well, the markets are actually really hot. They're really valuable for software companies and SaaS companies and service companies, (but) are you solving a real problem?"