AmeriLife, a health
insurance, benefits and retirement planning firm based in Clearwater, isn’t yet
as big as companies like WellCare and UnitedHealthcare — both of which have a
large presence in the region. But thanks to a new round of investment, it’s well
on its way.
The company’s new
backer is Thomas H. Lee Partners, a prominent private equity firm that acquired
a controlling stake in AmeriLife from venture capital outfit J.C. Flowers &
Co. LLC.
AmeriLife CEO Scott
Perry declines to disclose the exact amount of the deal. He says the
business is now valued at nearly $1 billion, though “the equity investment is
obviously significant less than that.” The firm’s management team retains a 10%
ownership stake of AmeriLife, which did around $300 million in sales last
year.
Thomas H. Lee,
Perry says, “wants to continue to fund our growth. It will mean more jobs and
more investment, but our executive team will remain in place. There will be no
relocation and no impact to the day-to-day operations of the business.”
‘We take a more
strategic view to acquisitions than some others. We're not looking to acquire
just anybody in our space.’ Scott Perry, CEO of AmeriLife
One situation that
could impact the business: the 2020 presidential election. Several Democratic
candidates have pledged to overhaul the insurance industry if elected, with
some even going as far as promising to eliminate private health insurance
altogether and institute Medicare for All, or some version of it.
“We certainly watch
the political landscape and how things develop,” says Perry, 56. “There are
some proposals out there that would threaten our business, but we don't see
those as viable political outcomes.”
AmeriLife would
also be insulated from systemic change, Perry believes, because of the way it’s
set up its business model. Instead of selling health and life insurance plans,
annuities and other financial planning products directly to end consumers, the
company has a robust network of carriers, employers and some 140,000
independent agents nationwide. (The company also owns and operates a
direct-to-consumer agency, AmeriLife Direct.)
Another buffer is
its size. The company — which employs 750 people, 450 of whom are based in
Clearwater — has at least one agent in every U.S. ZIP code, Perry says, and
that established infrastructure would be a big strength if a massive expansion
of Medicare occurs in the coming years. “This idea of Medicare reform would
have a positive impact,” he says.
Beyond Medicare and
other products for retirees and seniors, AmeriLife makes money from selling
employee benefit plans. It offers voluntary, supplemental insurance products —
such as vision, dental and long-term care coverage — workers can buy via
payroll deduction.
AmeriLife is also
positioned to diversify further. The firm made three acquisitions in 2019 alone
— growing its inorganic growth to 30% year-over-year — and Perry expects
to triple that number in 2020 thanks to the Thomas H. Lee investment.
Acquisitions will be targeted carefully, he adds, with an eye toward adding a
specific market or product.
“We take a more
strategic view to acquisitions than some others,” Perry says. “We're not
looking to acquire just anybody in our space.”
The firm’s strategy
isn’t solely focused on straight-up acquisitions. Perry says AmeriLife wants to
add more independent agents and brokerages to its network. “We’re looking for
high-caliber leaders,” he says, “small business owners who want to maintain an
equity stake in their business and continue to grow it as part of our firm.”
Demographic numbers
bear out AmeriLife’s confidence in the course it has set. Some 10,000 Americans
turn 65 every day, Perry says, and they don’t need just life and health
insurance. “They need protection from the things they worry about most.
Typically, that’s unexpected health care expenses, but it also includes running
out of money. People are living longer than they thought they would.”
The new round of
investment also raises the firm’s confidence, Perry says. “It's a strong
affirmation of the direction that we are headed is the right direction. It
pumps everybody up.”
The privately held
firm does not disclose specific revenue figures, but Perry says organic growth
had been around 10-12% year-over-year, before the Thomas H. Lee investment.
With the accelerated growth, Perry, for one, plans to be bigger than $300
million rather quickly.
“If five years, we
expect gross revenues to be somewhere in the $500 million to $600 million
range,” he says. “We expect to, at minimum, double the size of the business.”
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