Reliance Global Group, Inc. (RELI) has emerged as a prominent player in the insurance industry, driven by its strategic acquisition strategy and pioneering investments in transformative technology. With a focus on disrupting the traditional insurance model, Reliance has embarked on a transformative journey, solidifying its position as a leading innovator in the rapidly evolving insurtech space.
Business Overview and History
Reliance Global Group was incorporated in Florida on August 2, 2013, under the name Ethos Media Network, Inc. In September 2018, Reliance Global Holdings, LLC, a related party, purchased a controlling interest in the company. Subsequently, on October 18, 2018, Ethos Media Network, Inc. was renamed Reliance Global Group, Inc.
The company operates as a diversified entity engaging in business in the insurance market and other related sectors. Reliance's management team boasts over 100 years of combined expertise in the insurance, real estate, and financial services industries. In the insurance sector, the management team has extensive experience acquiring and managing insurance portfolios in several states, as well as developing specialized programs targeting niche markets.
Reliance's primary strategy has been to identify specific risk-to-reward arbitrage opportunities and develop them on a national platform, thereby increasing revenues and returns. The company then seeks to acquire undervalued wholesale and retail insurance agencies with operations in growing or underserved segments, expand and optimize their operations, and achieve asset value appreciation while generating interim cash flows.
As of December 31, 2024, Reliance has acquired nine insurance agencies, including Employee Benefits Solutions, U.S. Benefits Alliance, Commercial Coverage Solutions, Southwestern Montana Insurance Center, Fortman Insurance Agency, Altruis Benefits Consultants, UIS Agency, J.P. Kush and Associates, and Barra Associates (rebranded as RELI Exchange). The company's focus on strategic acquisitions has allowed it to enhance its market presence and expand its product offerings across the United States.
Financial Performance and Metrics
In the year ended December 31, 2024, Reliance Global Group reported total revenue of $14.05 million, a 2% increase from the previous year's $13.73 million. This upward trend can be attributed to the company's sustained organic growth within its current operations.
The company's commission expense increased by 12% to $4.19 million, primarily driven by changes in the revenue mix and organic revenue growth. Salaries and wages decreased by 4% to $7.23 million, demonstrating Reliance's ability to effectively and efficiently utilize its human capital while continuing to drive organic growth.
General and administrative expenses increased modestly by 3% to $4.22 million, driven in part by general inflation and acquisition-related costs, which were offset by one-time cost efficiency enhancements. Total operating expenses decreased by 21% to $21.75 million, resulting in a 45% improvement in the company's loss from operations, which decreased to $7.70 million.
Net loss for the year ended December 31, 2024, decreased by 24% to $9.07 million, compared to $12.01 million in the previous year. This positive swing can be attributed to lower intangible asset impairment charges and the successful simplification of the company's balance sheet, which led to a decrease in adverse impacts from fair value swings affecting profitability.
Adjusted EBITDA, a non-GAAP metric that the company considers a key performance indicator, improved significantly by 39% from a loss of $0.5 million to a loss of $0.3 million. This demonstrates Reliance's continued progress towards sustained EBITDA profitability, driven by the implementation of its disciplined OneFirm strategy and exciting organic operational growth.
Financials
For the most recent fiscal year (2024), Reliance Global Group reported: - Revenue: $14.05 million - Net Income: -$9.07 million - Operating Cash Flow: -$2.52 million - Free Cash Flow: -$2.60 million
In the most recent quarter (Q3 2024), the company reported: - Revenue: $3.44 million - Net Income: -$0.84 million - YoY Growth: Revenue increased by 5% and net loss decreased by 54% compared to Q3 2023, driven by increased commission income and cost efficiencies.
Liquidity
As of December 31, 2024, Reliance Global Group reported the following liquidity metrics: - Debt/Equity Ratio: 4.81 - Cash: $1.80 million - Current Ratio: 1.13 - Quick Ratio: 1.13
The company entered into a $600,000 revolving credit facility with Americana on March 5, 2025, of which $450,000 was outstanding as of March 6, 2025.
Business Segments
Reliance Global Group operates as a single reportable segment - the Insurance Segment. This segment generates revenue primarily from insurance commissions earned through brokering, producing, and servicing agreements between insurance carriers and clients.
Within the Insurance Segment, the company focuses on two main lines of business:
1. Healthcare: This line includes insurance plans for individuals and families, Medicare supplements, ancillary coverages, and small business insurance. It represents the largest portion of the company's commission income, accounting for $10.44 million, or 74%, of total revenue in fiscal year 2024.
2. Property & Casualty (P&C): This line includes auto, home, and commercial insurance policies. It generated $3.45 million, or 25%, of the company's total revenue in fiscal year 2024.
The company also earns additional revenue from contingent commissions, profit-sharing, overrides, and bonuses based on meeting certain revenue or profit targets established by the insurance carriers.
Geographic Performance
Reliance Global Group's operations are highly concentrated in several key states, including Michigan, New York, Montana, New Jersey, Ohio, and Illinois. These states collectively accounted for 100% of the company's annual revenue in both fiscal years 2024 and 2023.
Technological Innovation and Insurtech Advancements
Reliance Global Group has made significant strides in the insurtech space, positioning itself as a leader in the industry. In 2021, the company launched its proprietary direct-to-consumer platform, 5MinuteInsure.com (5MI), which enables consumers to compare and purchase car and home insurance in a time-efficient and effective manner. Currently live in 44 states, 5MI offers coverage from more than 30 carriers.
Building on the success of 5MI, Reliance introduced the RELI Exchange platform, which combines the low barriers to entry of an agency network with state-of-the-art technology. RELI Exchange leverages artificial intelligence and data mining to provide instant and competitive insurance quotes from over 30 carriers nationwide, while reducing administrative burdens for agents. The platform's agent roster has increased by close to 300% since its inception.
In September 2024, Reliance launched the beta version of its advanced AI-powered Quote & Bind InsurTech solution for commercial policies, ahead of the original Q4 2024 schedule. This cutting-edge platform enables agents to generate real-time quotes and bind commercial insurance policies instantly from their dashboard, significantly improving efficiency and speed.
The company's focus on technological innovation and the development of proprietary insurtech solutions has been a key driver of its growth and competitive advantage. By continuously enhancing its digital capabilities, Reliance is poised to disrupt the traditional insurance landscape and provide exceptional service to both agents and clients.
Acquisition Strategy and Future Outlook
Reliance's growth strategy is heavily centered on strategic acquisitions, with a focus on identifying and acquiring undervalued wholesale and retail insurance agencies. The company's access to capital and management's expertise in acquisitions, operations, and financial management have been instrumental in its ability to source and integrate accretive acquisitions.
One of Reliance's most anticipated acquisitions is the pending acquisition of Spetner Associates, a dynamic tech-enabled benefits enrollment company and a leader in its field. In May 2024, Reliance entered into a stock exchange agreement to acquire 80% of Spetner's outstanding shares for $16.05 million, with the option to acquire the remaining 20% based on a multiple of Spetner's EBITDA.
The Spetner acquisition, which is expected to close in the near future, is projected to double Reliance's annual revenue to approximately $28 million and significantly boost the company's adjusted EBITDA. The integration of Spetner's operations and client base is expected to create substantial synergies and cross-selling opportunities, further strengthening Reliance's position in the insurance industry.
In addition to the Spetner acquisition, Reliance has recently formed a new Real Estate division, drawing on CEO Ezra Beyman's extensive background in the real estate and mortgage brokerage industries. The company has brought on Abe Miller, a successful real estate investor and M&A executive, to oversee this new division and advise on future real estate transactions, further diversifying Reliance's revenue streams.
Industry Trends
The global insurtech market is experiencing rapid growth, with the market size valued at $17.08 billion in 2024. It is expected to grow to $82.30 billion by 2029, at a compound annual growth rate (CAGR) of 38.9%. This trend bodes well for Reliance Global Group's focus on technological innovation and its RELI Exchange platform.
Risks and Challenges
As with any growing company, Reliance Global Group faces several risks and challenges that investors should be aware of. The insurance brokerage business is highly competitive, with numerous firms actively competing for customers and insurance markets. The company's ability to continue its acquisition strategy and identify suitable targets at attractive valuations is essential to its future growth.
Additionally, Reliance's operations are currently concentrated in a few states, making the company susceptible to adverse economic conditions, natural disasters, or regulatory changes in these regions. The company's ability to diversify its geographic footprint will be crucial in mitigating this risk.
The insurance industry is also subject to extensive regulations, and changes in laws and regulations could have a material adverse effect on Reliance's business and financial results. The company must ensure that it remains compliant with all applicable laws and regulations in the jurisdictions in which it operates.
Lastly, the company's reliance on technology and the potential for cybersecurity breaches or other disruptions to its information technology systems pose risks that Reliance must actively manage and mitigate.
Conclusion
Reliance Global Group has emerged as a formidable player in the insurance industry, driven by its strategic acquisition strategy and focus on technological innovation. The company's successful integration of its agency operations under the OneFirm approach, coupled with the development of cutting-edge insurtech solutions, has positioned it for sustained growth and profitability.
The pending acquisition of Spetner Associates is expected to be a significant catalyst for Reliance, doubling its annual revenue and boosting its adjusted EBITDA. Additionally, the formation of the new Real Estate division diversifies the company's revenue streams and provides additional avenues for growth.
As Reliance Global Group continues to navigate the evolving insurance landscape, its ability to identify and capitalize on strategic opportunities, while effectively managing risks, will be crucial to its long-term success. Investors should closely monitor the company's progress in executing its growth strategy and leveraging its technological advantages to drive value creation in the rapidly expanding insurtech market.