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Insurance Buying Aggregation Across Private Equity Owned Portfolio Businesses

There has always been a view that Private Equity Companies prefer not to aggregate portfolio buying volumes where synergies exist as this may add to the complexity of the financial structures. Agreed that some categories do not lend themselves to an immediate synergy benefit, but 7 Steps have been working closely with some PE houses on delivering synergy benefits across their portfolio.

Many suppliers now recognise that they can add value and deliver a unique selling point against their competitors if they can deliver products that can be used in facilitating aggregate benefits driven my multi company volumes.

Insurance renewals over the past couple of renewal cycles the market has become more challenging, and we are seeing renewal values increasing across the Property and Casualty insurance categories. This large spend area is growing within organisations and now becomes a focus from the CFO like utilities did a few years ago. 

7SS have worked closely with firm that allows Private Equity portfolio companies to participate in an insurance fund and benefit from the volume that multi participants bring. The flexible nature of the fund allows participants to enter on the expiry of their own policy and retain the individual policy wording specific to their own business. The buying power that is delivered using this vehicle brings lower premiums and potentially the option to share excesses across portfolio’s.

This allows Private Equity houses to continue to transact business purchase or sale and not be tied in across portfolios.

There are many different value levers that aggregated insurance buying can offer and we are seeing more and more activity in this space.

Anyone that is interested in knowing more please reach out to someone at 7SS who can discuss further.