(Image source: Mitchell International.)
Stone Point Capital LLC (Greenwich, Conn.) has acquired Mitchell International (San Diego), a provider of technology, connectivity and information solutions to the property/casualty claims and Collision Repair industries through an investment and the acquisition of the equity position held by KKR (New York) and Elliot Management (New York). The firms did not disclose the terms of the deal.
“Stone Point shares our vision for being a growth-oriented, customer-driven company built on strong values,” comments Alex Sun, President and CEO, Mitchell. With Stone Point’s investment and experience, I look forward to maintaining our current strategic direction, continuing to grow across all our business segments and finding new ways to provide valuable, innovative solutions to our clients.”
Nick Zerbib, Senior Principal, Stone Point, observes that his company shared Mitchell’s vision of using the power of technology, expertise and connectivity to improve the efficiency and effectiveness of its clients. “In partnership with Mitchell’s leadership team, we look forward to supporting Mitchell’s future growth plans as it continues to invest in its market-leading solutions and its customers,” he comments.
The deal represents news not only for Mitchell, but for the auto claims estimation sector as a whole, according to Donald Light, Director, North America Property/Casualty Practice, Celent (Boston).
“Stone Point brings a depth of experience and investments in the property/casualty sector that should provide valuable advice and perspective for Mitchell,” Light comments. “Mitchell continues to go toe-to-toe with the two other leading firms in this sector, Solera and CCC—both of which are also owned by Private Equity firms.”
Challenges for Auto Claims Estimation Sector
In the near term, the sector faces the challenge of how to deploy machine learning and machine vision to expedite the estimation process and provide greater efficiency and accuracy to insurers and repair shops; and a better experience to claimants, according to Light. “Over the mid- and longer-term, the clock is ticking towards the day when on-board collision avoidance and autonomous vehicle technologies will reduce collision frequency and severity, reducing the count and cost of repairing damaged vehicles, and thereby the demand for Mitchell’s and its competitors’ services,” Light cautions.
This latest change of ownership for Mitchell superficially resembles other cases of private equity investors replacing another that have transpired during past few years among the three major insurance and collision estimating and information providers, notes Stephen Applebaum, Managing Partner, Insurance Solutions Group (Chicago). However, he insists that Stone Point is uniquely positioned to help drive Mitchell to significant growth in a number of ways.
Mitchell’s major differentiator is its highly successful Casualty division, which provides auto, workers’ compensation and pharmacy benefit bill review and management. Applebaum notes that Stone Point’s workers’ compensation, risk and benefits portfolio already includes Genex (already a Mitchell Casualty customer) as well as Sedgwick Claims Management, the largest third-party administrator in the risk and benefits space—and which very recently acquired large global competitor Cunningham, Lindsay. Mitchell’s recent foray into Telehealth is likely to benefit all of these operations and open new and larger market opportunities also, according to Applebaum.
“Mitchell’s other division, Auto Physical Damage, which has been under dynamic new leadership since 2016, has been innovating its return to growth in the auto insurance and collision repair claims space,” Applebaum says.
The division has introduced AI-enabled photo estimating through a partnership with InsurTech Tractable (London), developing a what Applebaum calls a revolutionary collision repair scan using Bosch (Gerlingen, Germany) technology, introducing a new open framework for inter-industry data exchange and appointed as General Motors’ technology partner for its emerging shop certification program—a fast growing disruptor of existing insurance and repair market dynamics.”
New and Powerful Solutions
Applebaum believes that Mitchell is well positioned for the age of connected cars. “With its deep roots in both auto physical damage and casualty, Mitchell will be in an ideal position to develop new and powerful solutions that bridge both sides of their business that will benefit the auto insurers, repairers, car makers, consumers and healthcare providers and payers of the future,” he says.
“The Stone Point investment is shrewd and the beneficiaries are likely to also include the Mitchell team and their customers,” Applebaum adds.