Insurance Holdings Raises $67M Round

Insurance Holdings of America Inc. (IHA) of Beverly, Mass., raised $67 million in what will likely be a final round of private financing.

Ford Motor Credit was the lead equity investor, reportedly investing $50 million in IHA, which develops and retails financial service technology. Additional equity commitments came from funds managed by Prospector Partners of Hartford, Conn., GSA Inc., Dowling & Partners Asset Management and existing investor Eastbourne Capital Management.

The company raised $10 million from Pacific Life Insurance Co. through the placement of a subordinated debt tranche, said Stuart Robbin, chief financial officer at IHA.

IHA retained Goldman Sachs Group Inc. to place the offering on its behalf.

The company has developed an Internet-based core technology that gives customers access to state-of-the-art financial product and service alternatives. The company has an existing partnership with Sam’s Club discount stores to install online kiosks for insurance sales in these stores. Robbin said the company hopes to have these kiosks up and running in every store in the country by the end of next year.

“Ford has entered into a strategic agreement with us to use the technology to enable dealerships to sell insurance,” Robbin said.

In all these partnerships, the company will have separately franchised insurance agents operating the kiosks who will have to be registered in each state. Currently, the technology has been approved in 6 states, an increase from two at the time of the company’s $24.75 million third round (PEW Dec. 7, 1998, p. 1).

Proceeds from the investment will be used to prepare the company for a public offering. Preparations will include upgrading the infrastructure behind these programs and adding new functions and services.

Robbin said he did not anticipate having to clear additional regulatory hurdles in order to implement the Ford partnership.