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Tuck-in Acquisition or Transformation?

Thinktum: a Canadian based, modular, low code insurance underwriting solution that, at least partially, services wealth managers

Agrees to acquire Illustrate: an insurance analysis, proposal, and execution tool that happens to also be in Canada and is also a modular, low-code platform.

Both companies are low-code platforms that can help advisors service their clients' insurance needs. One skews back-office and one skews front-office. Our thesis has been around tuck-in acquisitions, but the synergies in this case seem pretty robust. In our view, it pushes into the transformative acquisition realm. But we think it is still valid evidence of the appetite for strategic acquisitions globally.

It also represents a potential blending of InsureTech and WealthTech. InsureTech has traditionally focused on making the underwriting process more efficient for insurance companies and WealthTech, in so far as it touches insurance, has focused on advisor enablement. We know that is painting things with an overly-wide brush so, in the interest of efficiency, we hereby pre-agree to all your arguments to the contrary.

From a thematic standpoint, this could help advisors provide yet another service to their clients with expertise, at scale, and without an undue burden on their day. The industry has talked for quite some time about how advisors will need to transition from portfolio managers to one-stop-shop financial gurus, and that is now starting to happen. At least as far as we see it.


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