Warburg Pincus recaps SCM Insurance Services

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By Ted Liu

Warburg Pincus, LLC has acquired a controlling stake in SCM Insurance Services from former majority shareholder, TorQuest Partners, which will remain as minority shareholder. Financial terms were not disclosed.

Established in 1986, Edmonton, Alberta based SCM Insurance Services is Canada’s largest independent, privately owned insurance services provider. SCM Insurance Services has been servicing the insurance and risk management community for the past 31 years with over 200 locations and 2,900 employees.

In August 2010, TorQuest Partners, in partnership with founder Larry Shumka and SCM’s management, acquired a majority stake in SCM.

Morgan Stanley & Co. LLC acted as financial advisor to SCM in connection with this transaction.

“Along with our teams of experienced professionals, our market-leading technology, and our extensive data intelligence, this important investment from Warburg Pincus will help SCM implement the next phase of our successful growth strategy and allow us to serve our clients in even more ways and in more places,” said Bob Fitzgerald, CEO of SCM Insurance Services. “Warburg Pincus is not only the right partner at the right time for SCM, it is also the right fit culturally and strategically.”

“SCM has established itself as the leading provider of outsourced claims management and tech-enabled insurance services in Canada, and has positioned itself well for further expansion in the U.S.,” said Jeffrey Stein, Principal, Warburg Pincus. “Through its wide range of market-leading services, the Company has already become an attractive one-stop shop for the P&C industry and we see meaningful opportunity to continue investing in and expanding its service lines.”

Chandler Reedy, Managing Director, Warburg Pincus, added, “We look forward to partnering with Bob and his team and TorQuest to support SCM’s ongoing growth in Canada and further expansion in the U.S. market.”

“Under TorQuest’s ownership, in partnership with founder Larry Shumka and SCM’s management, the Company’s revenue has grown by three times through a commitment to market leadership and excellence in the Canadian insurance market,” said TorQuest Partner Alan Lever.

“We are excited about the future prospects for SCM as it moves to its next phase of growth in partnership with Warburg Pincus,” Eric Berke, Managing Partner at TorQuest, added. “SCM is another great example of TorQuest partnering with an exceptional founder and management team to support the growth of an industry-leading business.”

In May 2017, SCM made its initial entry into the United States by acquiring Nixon & Company, Inc., providing it with a platform from which to continue building out its service offerings both domestically and into the Lloyd’s of London marketplace. This U.S. expansion is consistent with SCM’s commitment to expand geographically in line with the needs of its clients who are seeking market-leading offerings in third-party administration and innovative adjusting solutions.

“We are also excited for the opportunities that this investment will bring for our staff across North America,” said Bob Fitzgerald. “It will allow us to continue to invest in the right technologies, training and development that makes SCM a great place to work and grow your career.”

photo credit: SCM