Information on the Target

Halo, an insurance business founded in 2009, has been successfully backed by Bridges and Magenta Partners, with Ernesto Suarez serving as its chief executive. The company specializes in providing affordable insurance solutions for rental cars through its online platform, iCarhireinsurance.com. With a focus on consumer savings, Halo enables customers to secure lower-cost insurance online, bypassing the often higher fees charged at rental desks.

In addition to its initial offerings, Halo has expanded its services to include InsuretheGap.com, which provides Guaranteed Asset Protection (GAP) insurance policies at considerably reduced rates compared to traditional car dealerships. Currently, Halo operates websites in six different languages, catering to a diverse range of customers worldwide. The company has experienced remarkable financial growth, recording a compound annual growth rate of 145% in EBITDA over the past four years and selling 325,000 policies last year.

Industry Overview in the Target’s Specific Country

The insurance industry in the United Kingdom has evolved significantly in recent years, driven by advances in technology and changing consumer preferences. The rise of digital platforms has transformed traditional insurance models, enabling direct consumer engagement and creating new distribution channels. This shift has led to increased competition among insurers, which in turn has resulted in more innovative and cost-effective solutions for consumers.

Furthermore, the growth of the gig economy and changes in travel behavior have influenced the demand for short-term and rental car insurance. Consumers now seek flexibility and convenience, prompting insurance providers to adapt their offerings accordingly. The rise in online platforms for comparing and purchasing insurance has empowered consumers to make informed choices about their insurance coverage.

In recent years, the UK insurance market has also witnessed a surge in insurtech firms that leverage technology to enhance underwriting processes and customer service. These new entrants are often characterized by agile business models and a customer-centric approach, leading to increased disruption within the industry. As a result, traditional insurers are compelled to innovate to retain market share and meet evolving consumer expectations.

Overall, the UK insurance landscape presents significant opportunities for companies like Halo that can deliver innovative and competitive products. The combination of technological advancements and shifting consumer behavior provides a conducive environment for growth within this sector.

The Rationale Behind the Deal

The acquisition of Halo by global insurance group Cover-More represents a strategic move to enhance Cover-More's portfolio by integrating a high-growth insurance business that is well-positioned in the rental car insurance market. Halo's innovative approach to providing economical insurance solutions appeals to the increasingly cost-conscious consumer base.

Moreover, Halo's established online presence and diverse product offerings, including its recent expansion into GAP insurance, align with Cover-More's commitment to delivering comprehensive and accessible insurance solutions. The growing demand for versatile insurance options creates a compelling opportunity for synergy between the two companies.

Information About the Investor

Cover-More Group is a globally recognized insurance provider specializing in travel insurance and related services. The company is distinguished by its commitment to innovation and customer satisfaction, focusing on delivering value-added products that meet the evolving needs of its clients. Cover-More has a strong presence in multiple markets, enabling it to leverage best practices and insights from different regions to enhance its offerings.

With a robust financial foundation and extensive industry experience, Cover-More is well-positioned to capitalize on the growth potential that Halo presents. The acquisition reinforces Cover-More's strategy to diversify its insurance portfolio and expand its reach within the competitive UK insurance market.

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Considering the high growth trajectory of Halo and its innovative insurance offerings, the acquisition by Cover-More appears to be a strategic and timely investment. Halo's impressive EBITDA growth and high policy sales demonstrate its market viability and the effectiveness of its business model, making it an appealing asset for Cover-More.

Moreover, the disruption that Halo has introduced into the rental car insurance sector showcases its potential for continued expansion and profitability. By integrating Halo’s capabilities, Cover-More can enhance its competitive edge in the insurance marketplace, particularly within the burgeoning online sector.

Additionally, the favorable industry conditions in the UK, characterized by increasing consumer demand for flexible and affordable insurance options, further support the rationale behind this investment. As more consumers turn to online platforms for their insurance needs, the synergy between Halo and Cover-More positions both companies to capture additional market share.

In conclusion, the acquisition of Halo is likely to be a strong investment for Cover-More, given the considerable growth potential and resilience of Halo’s business model in a dynamic insurance landscape.

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