Western & Southern Financial Group has made its first acquisition of an insurance technology company, a move CEO John Barrett told me helps Western & Southern remain relevant.
Downtown-based life insurance, investment advisory and real estate firm Western & Southern has acquired New York-based Fabric Technologies Inc. and its Fabric Insurance Agency unit. Financial terms of the deal were not disclosed.
Fabric, whose headquarters are in Brooklyn, features a digital life insurance platform and mobile app. The company, founded in 2015, serves more than 60,000 families and has placed billions of dollars in life insurance coverage.
Western & Southern acquired Fabric to enhance the companies’ shared vision of bringing an easy-to-use digital platform to the mass market to buy insurance and other financial services.
“We are doing our best to digitize the business,” Barrett told me. “We think that’s where things are going. We don’t want to wake up one day and find we’re irrelevant.”
Fabric offers term life insurance, a free last will and testament, family finance tools and other services such as college savings plans in partnership with other companies. Customers can complete the life insurance application in about 10 minutes, with immediate approval available to most customers.
Western & Southern has made investments in several other insurance technology companies, Barrett said, but it hadn’t acquired 100% of such a company until now.
“When something like Fabric came along, we said this is the right one,” Barrett said. “They’ve actually sold insurance. They need the heft in marketing and capital we bring to realize their goals.”
Adam Erlebacher, Fabric’s co-founder and CEO, agrees.
“By joining forces with Western & Southern, we are able to accelerate our mission to protect millions of families with modern and affordable financial security products,” Erlebacher said.
Western & Southern bought Gerber Life Insurance Co. in 2018. That company provides direct-to-consumer sales of insurance largely for children. While it uses digital technology, the Fabric deal brings Western & Southern a company that’s was created to provide a digital life insurance platform.
Western & Southern, which has $67 billion in assets, has the industry’s best capital position, Barrett said. It plans to invest heavily in the business.
“Whatever we paid for it will be minuscule to what we put into it,” he said while not divulging how much the company paid for Fabric.
The company weighed whether to buy a digital life insurance company or build its own digital operation.
“We came to the conclusion that building would take us a couple years and buying would take a couple weeks,” Barrett said.
Western & Southern has been a leader in the digital world. It teamed with downtown-based Fifth Third Bancorp and Over-the-Rhine-based startup catalyst Cintrifuse in 2020 to create the Fintech Frontier, an effort to support new financial technology ideas and companies.
But Barrett believes his firm needs to do more. It will consider further acquisitions in the insurtech field as long as they’re “economically feasible” and generate a return, he said. His company clearly has an appetite to expand in the digital area.
“I think our company is positioned better than anybody I can think of in our world, yet I’m terribly uncomfortable that we haven’t done enough,” Barrett said.
