FNF's Digital Buys Fallick Insurance

Zacks

Digital Insurance, a wholly owned subsidiary of Fidelity National Financial (FNF), acquired the Mountain View based Fallick Insurance Services to widen its presence in the North Californian region. Fallick insurance addresses the execution, maintenance and communication of employee benefit solutions for companies with small and medium sized operations. The addition of Fallick in its portfolio is expected to strengthen the employee benefits business of Fidelity.

As per the deal, Fallick will be combined with the largest unit of Digital Insurance – Digital Benefit Advisors (:DBA). It will join DBA’s office located in Los Altos/Silicon Valley.  

The deal allows Digital Insurance to access the clients of Fallick Insurance. Over the last decade Fallick Insurance has served about 175 small and medium sized companies in the Bay area. Digital Insurance now aims to provide enhanced and expanded services to these Fallick customers.

Digital’s DBA opted to enhance its services in terms of quality by uniting the expertise of local market advisors and the refined in-company technology and resources. As a result employers are exposed to a number of carriers, dynamic tools and proprietary products which enables them to successfully manage the intricacies of health care reform.

Owing to the health care reforms and other marketplace changes that are expected to take place in 2014, the industry is likely to be hit by a strong competitive environment. Since Digital is adding Fallick in its portfolio , it is expected to stay ahead in competition.

Earlier this week Digital inked a license agreement with Dominion Analytics to fortify the DBA division’s operations. The transaction is aimed at employing a set of proprietary tools to help employers select benefits by assessing the objective criteria and maximize the value of their benefit plans.

In the first quarter of 2013, revenues of Fidelity increased 72.3% year over year to $2.1 billion. We expect the agreement with Dominion Analytics and the subsequent acquisition of Fallick Insurance to increase Digital’s customer base thereby enhancing revenues of the parent company.

Fidelity currently carries a Zacks Rank #2 (Buy). Among others in the industry, American Safety Insurance Holdings Ltd (ASI), AXIS Capital Holdings Inc. (AXS) and Global Indemnity plc (GBLI) carry a favorable Zacks Rank #1 (Strong Buy) and appear impressive.

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Read the Full Research Report on FNF

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