US Insurance Insurance Brokers: Takeaways from our Virtual Conference

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US Insurance Insurance Brokers: Takeaways from our Virtual Conference

Valuation Method and Risk Statement

Loss cost inflation may be better/worse than expected, resulting in better/worse than

expected underwriting margins and earnings. Pricing for auto insurance may rise more/less

than expected, resulting in better/worse than expected underwriting margins and earnings.

Large catastrophe losses could hinder growth in earnings and book value. Credit losses could

be worse than expected. Our price targets are based upon price-to-book multiples, enterprise

value-to-EBITDA multiples and SOTP methodologies.

Goosehead Insurance Inc:

Risks include: An overall decline in economic activity, higher competition, and lower than

forecasted agent and producer productivity could create a slowdown in written premium and

put pressure on revenue growth and operating margins. Our price target is based upon an

enterprise value-to-EBITDA multiple.

Marsh McLennan:

Risks include: Disappointing pricing for commercial lines insurance or reinsurance may reduce

expectations for revenue growth and operating margins. Global GDP growth outside of our

expectations would affect organic revenue growth, particularly within the company’s

Consulting operations. Changes to health care reform could impact revenues at the Mercer

unit. Acquisitions could pose integration risk. Our price target is based upon an enterprise

value-to-EBITDA multiple.

TWFG Insurance Services Inc:

forecast agent productivity could create a slowdown in written premium and put pressure

revenue growth and operating margins. Our price target is based upon an Enterprise Value-

to-EBITDA multiple.

The Baldwin Insurance Group Inc:

Risks include: More competitive than expected pricing in commercial lines insurance or the