Palamon Capital Partners (Palamon), a pan-European growth investor, has acquired a majority stake in FairConnect, a provider of connected insurance services.
Palamon and its financing partners have invested and committed more than EUR100 million of funding to the Company.
FairConnect is a leading provider of connected services to insurers that are transforming the insurance industry with usage-based premiums and value-added services. For example, customers with “connected motor insurance” can benefit from reduced premiums and access a range of new services (such as accident and emergency assistance, breakdown diagnostics and theft recovery) which is driving rapid growth in the sector of more than 20 per cent per annum.
FairConnect is headquartered in Switzerland and has significant operations in Italy, which is the world’s most developed connected car insurance market. In Italy today 15 per cent of car insurance policies are usage-based, which is expected to quadruple to 60 per cent by 2030. Connected motor insurance companies can tailor their customers’ premiums more accurately, assist in claims processing, improve margins, increase sources of revenue and enhance safety. FairConnect is a leader in IoT (“Internet of Things”) technology with best-in-class analytics and serves some of the largest connected insurance programmes in Europe.
FairConnect will continue to be led by Chairman and CEO, Carmine Carella, who together with his team were pioneers in the application of Machine to Machine communications and Internet of Things technologies to the insurance sector. In 2001 Mr Carella founded Cobra Telematics, which led to the insurance industry’s successful adoption of telematics.
Palamon has a long-standing investment thematic in data and analytics and has tracked and provided strategic support to FairConnect over the past four years as the company has established itself as a sizeable player in the telematics market. Palamon believes that the Company presents an attractive opportunity to rapidly scale by targeting high growth markets and expanding into adjacent insurance verticals, both organically and through M&A.
Julian Carreras, Partner of Palamon Capital Partners, says: “Connected insurance is a hyper-growth sector that has reached an inflection point in terms of adoption. With an established blue-chip customer base and proven expertise, FairConnect is one of the few sizeable players positioned to capture the exceptional growth in the sector. Palamon invests in high growth companies and as FairConnect is expecting to double its user base to over 400,000 during 2018 alone, we are delighted to be partnering with Mr Carella and his pioneering team to accelerate expansion across verticals and new markets.”
Carmine Carella, Chairman and Chief Executive of FairConnect, says: “I am delighted to be partnering with Palamon, who have been close to us throughout our development and now bring international business development reach, strategic thinking, M&A expertise and financial support to continue the rapid growth within our client portfolio and accelerate our global expansion. I am proud of the progress we have made so far but we are just at the beginning of what promises to be a tremendously exciting growth journey. We are well positioned to shape the future of the emerging connected insurance sector.”
