Company: Goosehead Insurance, Inc.
Symbol: GSHD
Description: They are a leading independent personal lines insurance agency, based on personal lines revenue, reinventing the traditional approach to distributing personal lines products and services throughout the United States.
Trade Date: 4/27
Shares: 8.5 million
Price Range: $14.00-$16.00
Underwriter(s): J.P. Morgan, BofA Merrill Lynch
Co-Manager(s): Keefe Bruyette & Woods, William Blair
Terms Added: 4-17-18
Business: They were founded with one vision in mind—to provide consumers with superior insurance coverage at the best available price and in a timely manner. By leveraging their differentiated business model and innovative technology platform, they are able to deliver to consumers a superior insurance experience. Their business model, in contrast to the traditional insurance agency model, separates the sales function from the service function, thus enabling agents to focus on selling, and service personnel to focus on delivering superior client service. In addition, their technology platform empowers their agents with tools to better manage their sales initiatives, and provides their service personnel with real-time 360-degree visibility of client accounts. As a result, they have achieved best-in-class net promoter scores for client service, nearly 2.0x the 2016 P&C industry average.
They represent over 80 insurance companies that underwrite personal lines and small commercial lines risks, which typically enables them to provide broader insurance coverage at a lower price point than competing agents who represent only a few carriers, carriers with captive agents or carriers that distribute directly to consumers.
Financials: For the years ended December 31, 2016 and 2017, they generated revenue of $31.5 million and $42.7 million, respectively, representing year-over-year growth of 36%. This growth has been driven by their recruiting team’s ability to recruit talented agents to their platform, their agents’ leading productivity in winning new business and their service centers’ ability to retain renewal business. All of their growth has been organic; they have not relied on mergers or acquisitions. Furthermore, they are profitable. For the year ended December 31, 2017 they generated $8.7 million of net income.
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