Metromile, Inc. (“Metromile”), the leading digital insurance platform and pay-per-mile auto insurer, and INSU Acquisition Corp. II (NASDAQ: INAQ) (“INSU II”), a publicly-traded special purpose acquisition company sponsored by Cohen & Company, LLC, a subsidiary of Cohen & Company Inc. (NYSE American: COHN), announced today that they have entered into a definitive business combination that will result in Metromile becoming a publicly listed company. Upon closing of the transaction, the combined company will be named Metromile, Inc. and is expected to remain listed on NASDAQ under the new ticker symbol “MLE”.
Metromile is revolutionizing the fragmented $250+ billion U.S. personal auto insurance market with real-time digital auto insurance personalized for low-mileage drivers. About two-thirds of U.S. drivers are considered low-mileage and could be overpaying for auto insurance because they do not pay per mile. Today, Metromile’s insurance customers save 47% on average compared to what they were paying their previous auto insurer.1 Metromile is making auto insurance fairer with pricing and billing by the mile, with precise rates based on how and how much they drive instead of industry-standard approximations or estimates.
Metromile’s fully digital customer experience is designed for the modern driver. Customers sign up, access customer support and file claims through its mobile app. Claims are handled quickly and, in most cases, are fully automated. Exclusive features like street sweeping alerts and auto health tips engage drivers along the way. The result is a community of fiercely loyal customers who enjoy far more than price savings.
By downloading Metromile’s free Ride Along™, consumers can determine if they are a low-mileage driver, see what they could save with Metromile before switching and get their best rate.
With data science at its core, Metromile unlocks the predictive value of data generated by autos, mobile phones and other sources. Its model translates into a better customer experience, higher customer retention rates, and greater operating profits, while lowering customer acquisition costs, fraud and servicing expenses.
Additionally, with Metromile Enterprise, the company is now powering the digital transformation of the global insurance industry. Launched in 2019, Metromile Enterprise is a cloud-based software-as-a-service solution that helps large, incumbent insurers transition into an era of modern mobility. By licensing key components of its technology platform – including claims automation and fraud detection tools – the company accelerates P&C carriers’ digital roadmaps and meaningfully participates in the profit improvements they realize, generating growing and recurring high-margin revenue.
Management and Investor Comments
“We founded Metromile to address the vast inequities in auto insurance, and we are proving that our model of real-time, digital auto insurance is both resilient and sustainable,” said Dan Preston, Chief Executive Officer of Metromile. “Our data science-driven technology platform creates a significant advantage, and customers are thrilled with their savings and experience. At the same time, we’re generating industry-leading underwriting metrics and unit economics. We’re demonstrating there doesn’t have to be a tradeoff between customer happiness and a healthy, profitable business.”
“We are excited to bring our vision of transforming the auto insurance industry to the public markets by partnering with Daniel Cohen and the team at INSU II, whose deep experience in the insurtech space will help propel Metromile to the next level,” continued Preston. “Today’s announcement launches Metromile’s new chapter in delivering the fairest, most individualized auto insurance. As a public company, we expect to use our strengthened balance sheet to accelerate our growth, bring Metromile nationwide, and scale rapidly toward sustained profitability. The era of fixed price auto insurance is coming to an end.”
“The massive U.S. auto insurance industry has been inefficient and ripe for disruption for decades, and Metromile’s technology platform provides a clear competitive advantage over the legacy carriers, positioning them at the forefront of the revolution they founded,” said Daniel Cohen, Chairman of the Board of Directors of INSU II. “Led by visionary technologists and complemented by the best veterans from top insurance carriers, Metromile has built a digital auto insurer with compelling and durable unit economics. The team has created a distinct offering that vastly differentiates Metromile in the marketplace.”
“Metromile’s technology sets them apart, driving huge advantages that will deliver significant and profitable growth for decades to come. I expect them to be a generational business,” added Chamath Palihapitiya, Founder and CEO of Social Capital. “In addition to saving consumers considerable amounts of money, the Metromile platform has been built from the ground-up as a technology company, reshaping how an insurance business operates. No industry should be more impacted by digitization than insurance, and Metromile is leading the way. We are excited to work with this team and support their important transition to becoming a public company.”
“I’ve long been a fan of Metromile’s team and amazing product. During these times of financial hardship, unemployment, and work from home, Metromile provides an important insurance alternative. The option to pay for insurance by the mile is a game changer and why I’m incredibly excited about Metromile’s future!” said entrepreneur and early Metromile investor Mark Cuban.
INSU II will combine with Metromile for aggregate consideration of approximately $842 million in INSU II Class A common stock and up to $30 million of cash consideration, plus an additional 10 million shares of Class A common stock that will be earned if the combined company achieves certain price targets over time. The transaction reflects an estimated implied pro forma enterprise value at closing of $956 million. In connection with the transaction, investors led by Social Capital, and including Hudson Structured Capital Management Ltd., doing its re/insurance business as HSCM Bermuda (“HSCM”), Miller Value, Clearbridge and Mark Cuban, have committed to invest $160 million in a private purchase of INSU II Class A common stock. Metromile’s earlier investors include New Enterprise Associates (NEA), Hudson Structured, Intact Ventures, Tokio Marine, Index Ventures, Mark Cuban and others, and will remain significant and active holders of Metromile’s stock.
It is anticipated that the transaction will provide Metromile with up to approximately $294 million of cash at closing. The combined company expects to use proceeds from the transaction to reduce existing debt and accelerate growth initiatives, including expanding into new markets, increasing partnerships and launching new products and features.
The Boards of Directors of each of INSU II and Metromile have unanimously approved the transaction. The transaction will require the approval of the stockholders of INSU II and Metromile, the effectiveness of a registration statement to be filed with the Securities and Exchange Commission (the “SEC”) in connection with the transaction, and other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in the first quarter of 2021.
Source: Global Newswire
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