Fidelity National Financial Buys Health Insurance Broker Digital Insurance

January 3, 2013

Florida-based title insurer and financial services firm Fidelity National Financial Inc. has acquired Digital Insurance Inc., a health insurance distribution and benefits management firm for small and medium sized businesses.

Terms were not disclosed.

Atlanta-based Digital manages 20,000 employer clients, 250 broker partnerships and more than $1 billion in annual premiums. Digital’s largest division, Digital Benefits Advisors, is a health benefits brokerage agency that utilizes Digital’s technology platform to target the small and medium business marketplace on a direct basis.

Digital said it will generate approximately $50 million in revenue in 2012 and is expected to achieve approximately $70 million in revenue in 2013.

Fidelity National Financial said Digital will allow it to accelerate and broaden its market position in the employee benefits arena.

“Digital Insurance serves a fragmented market with significant organic growth and consolidation potential and the company has a demonstrated record of success in efficiently distributing health benefit plans to the SMB marketplace,” said FNF Chief Executive Officer George P. Scanlon. “Digital has a unique business model and provides FNF with a growth opportunity in an industry undergoing major change.”

In the past two years, Digital has acquired 18 benefits agencies that have taken advantage of Digital’s infrastructure and technology to compete in the changing benefits marketplace.

FNF said it will support Digital’s strategy in mergers and acquisitions, as well as its outsourcing services to the industry.

Adam Bruckman, president and CEO of Digital Insurance, said FNF’s resources will allow Digital to accelerate its growth plans and the development of its platform across the country.

Digital will operate as a wholly-owned subsidiary of FNF under its current name.

In a recent interview with Insurance Journal, Mike Sullivan, Digital’s chief marketing officer, said changes and costs in the health insurance market are forcing some brokerages out of the line and prompting others to find partners to help them stay in. While many large brokers are equipped to serve larger employer accounts, some are also outsourcing their small accounts with fewer than 10 or 20 employees to firms like Digital Insurance, while others are trying to build up enough small group business and scaling their services to create economies of scale.

FNF a provider of title insurance, mortgage services and restaurant and other diversified services. It is the nation’s largest title insurance company through its title insurance underwriters – Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title. FNF also owns a 55 percent stake in American Blue Ribbon Holdings, a restaurant owner and operator of the O’Charley’s, Ninety Nine Restaurant, Max & Erma’s, Village Inn, Bakers Square and Stoney River Legendary Steaks concepts. In addition, FNF owns a majority stake in Remy International, Inc., which designs and distributes aftermarket and original equipment electrical components for cars and trucks. FNF also owns a minority interest in Ceridian Corp., which offers payroll services.

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