b'Insurance Corporate Finance | Equity Capital Markets The Root IPO is a noteworthy insurtech companylistings in a way which was not anticipated at the whose path to public company status stands invery start of 2020.contrast to another successful insurtech company,To put the sector in context, there were only a Metromile, which in 2020 chose a different path tohandful of IPOs across the whole LSE market for the public markets by way of a merger with a SPAC. Inmore than half of 2020. Furthermore, as a result of the section above we compare and contrast thesethe public M&A activity that this report discusses two approaches. [See Mergers & Acquisitionselsewhere - notably the RSA and Hastings groupsSPACs]. The end result for both companies was abeing taken private, fueled by private equity and successful entre to the public capital markets with allpension funds continued interest in the sector of its advantages to shareholders and management.- there were a dwindling number of publicly traded Starting in May 2020, the markets recovered andinsurance opportunities for investors in the London-successful follow on equity offerings were com- based markets. That said, one of the major IPOs pleted by Hiscox Ltd (Bermuda-based P&C insurer)towards the back end of 2020 saw reinsurance raising $463 million on the London Stock Exchange;start-up Conduit Re come to market raising over a American Financial Group, Inc. (multiline insurer)billion dollars. The structure follows a well-trodden raising $150 million; Lancashire Holdings (London- path with a Bermuda-based holding company based P&C insurer) raising $353 million on thestructure pursuing a London market listing, with London Stock Exhange; HealthEquity Inc. (managedoperational regulated entities underneath.care) raising $300 million; Stewart InformationWhat is perhaps particularly interesting is the fact Services (title insurer) raising $115 million; and BRPthat Conduit Re arrived straight onto the public Group (insurance broker) raising $258 million. Inmarkets without the backing of a cornerstone private addition, as a measure of the strengthening hous- Fund investor(s) following a series of equity and debt ing and mortgage markets during the Spring,follow on raises of the type seen from other start-mortgage insurers Essent Group Ltd raised $458ups such as Convex and Fidelis. Both Convex and million and NMI Holdings raised $230 million inFidelis announced significant additional private successful common equity offerings. capital raises during 2020 alongside others such as UK and Europe Brits follow only syndicate KI which launched with $500 million of capital from Blackstone.As with virtually every sector with publicly traded shares, insurance in 2020 was dominated by theConvex, Fidelis and Conduit share similar characteris-coronavirus outbreak and its accompanyingtics on one level and are backed by big name industry restrictions. Not only did carriers share prices feelentrepreneurs but have chosen different routes to the initial impacts but many were also grapplingmarket and it will be worth watching how these with how to keep the markets updated on poten- multi-billion dollar start-ups perform with contrasting tial COVID-19-related claims. In addition, though,ownership platforms and access to capital going the UK markets started 2020 with further addi- forwards. Certainly, market commentators have all tional uncertainty at a macro level with on Januarypointed to the fact that these new start-ups have the 31, 2020, the UK ceasing to be an EU member.clear benefit of not having legacy liabilities and Overall, it is therefore hardly surprising that IPOsCOVID-19-related exposures to work through.disappointed, with the volume of European IPOsThe incumbent players in the public area were all falling to their lowest level since 2012, as theactive in the secondary markets raising new money pandemic reduced investors confidence andfrom investors by way of institutional placings to prevented companies from proceeding with newbolster balance sheets in the wake of MAYER BROWN 39'