OWNERSHIP CHANGES
Acquisition Segments
(12/31/98-12/31/03)
Insurance Broker Whole and Asset Transactions
Insurance agency ownership is a constantly changing landscape. Some transfers of ownership involve long-time colleagues or competitors who know each other well. Others are hammered out between widely differing businesses, with consultants and other advisors representing both parties.
Significant acquisitions by national and regional brokers and banks are altering the playing field of agency ownership. The graph at the right and the table on page 141, courtesy of SNL Financial and MarshBerry, provide a snapshot of the last five years of publicly announced agency mergers and acquisitions. Not reflected in the graph and table are agency ownership changes where the deals were kept private.
This month Rough Notes introduces a new department, "Ownership Changes," which will provide a view of M&A activity involving property/casualty agents and brokers. We will provide a listing of deals--alphabetically by name of the purchasing firm--and, where feasible, some the background on the strategic plans of the parties involved. We invite agencies that are involved in ownership changes, especially ones that may not be widely publicized, to inform us by e-mailing one of the editors so that the change might be mentioned in this column.
The changes mentioned in this issue include deals announced between December 2003, and the beginning of March this year. Some agency mergers or acquisitions from that period were included in the "Regional News" column in the March issue and, therefore, are not repeated here.
Figures from the graph and table were compiled by SNL Financial and furnished by MarshBerry. They represent only the deals that were publicly announced. SNL Financial is an independent provider of financial information and research that monitors mergers and acquisitions in various sectors, including insurance agencies.
Acordia (www.accordia.com) (a subsidiary of Wells Fargo & Company) acquires Feeney Durler West Insurance Services, LLC, of Santa Rosa, California:
Feeney Durler West, a second-generation, family-owned insurance agency is a product of a merger in 1996 between two long-term local agencies. Its client list includes a heavy concentration of construction-related accounts. It also writes transportation risks, manufacturers, wineries, agribusiness and property owners. The agency will continue serving clients from its same location, with Michael K. Feeney becoming executive vice president of the office.
Kevin W. Conboy, president and CEO of Acordia, Inc., said Acordia will continue to look for acquisition opportunities that fit its operating philosophy and that expand Wells Fargo's reach both inside and outside its 23 banking states.
Arthur J. Gallagher & Co. (ajg.com) acquires firms in New York and Texas:
R.P. O'Brien & Co. of White Plains, New York, founded in 1988, writes commercial and personal lines P-C coverages as well as employee benefits. It specializes in professional liability products and directors & officers liability.
The Romine Group, Inc., of Austin, Texas, founded in 1988, is an employee benefits specialist working with both self-funded and fully insured markets. Bruce Romine, Don Munford and their associates will continue to operate in their current Austin and Dallas offices under the direction of J. Michael Brewer, executive vice president of Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co.
Brown & Brown (www.bbinsurance.com) acquires the assets of six agencies:
J. Gregory Brown & Company of Los Angeles and Newport Beach, California; Blumberg Associates, West Hartford, Connecticut; Doyle Consulting Group, Inc., of Philadelphia, Pennsylvania and Woodbridge, New Jersey; Manchester Insurance Agency of Santa Barbara, California; Niagara Insurance Group of Williamsville, New York; and Pashley Insurance Agency of Mamora, New Jersey
J. Gregory Brown & Company, Inc., Insurance and Financial Services provides property and casualty and employee benefits products and services producing annual revenues of approximately $5 million. The management team of Greg Brown and Jody Smith, along with their staff, will be joining Brown & Brown and will continue at their present locations.
Blumberg Associates, Inc., provides both commercial property and casualty and employee benefits products and services producing annualized revenues of approximately $2 million. The agency will be combining its operations with Brown & Brown's existing Newington, Connecticut, office, under the direction of Ed Lehan.
Doyle Consulting Group primarily provides employee benefits services, which produce total annual revenues of approximately $6.5 million. It operates throughout the greater Delaware Valley region. Frank Doyle, who will become a member of Brown & Brown's Executive Committee, will continue as profit center manager. He will be joined by Kevin Mullin and their current staff and will continue to operate from their existing locations as freestanding Brown & Brown offices.
Manchester Insurance Agency is a retail insurance agency that provides property and casualty products and services to clients throughout California. Annual revenues are approximately $3 million. The Manchester Insurance team, headed by Paul Manchester, will combine operations with Brown & Brown's existing Santa Barbara operation, headed by Susan Rodriguez.
Niagara Insurance Group, with annualized revenues of approximately $4.5 million, is a retail insurance agency which focuses on serving both the commercial property/casualty and employee benefits needs of its clients. The agency operates throughout the Northeast with its primary presence in the greater Buffalo/Niagara region. Niagara's leadership team, as well as that of the John G. Berger Insurance Agency, Inc., recently acquired by Niagara, will be part of the Brown & Brown team.
Pashley Insurance Agency, with annualized revenues of approximately $2 million, focuses on the South Jersey Shore area. Dan Pashley and his staff will continue to operate from their current location as a new Brown & Brown stand-alone office.
Guaranty Insurance Services (www.insurance.guarantygroup.com) of Austin, Texas, acquires TCT Insurance Group, of Dallas/Fort Worth:
TCT Insurance, with revenues of more than $7 million, has more than 8,500 personal and corporate clients and a staff of 50. It was formed in 1998 by an amalgamation of three Dallas-area agencies: the McCall Agency of Plano, which was founded in 1898; the LJK Insurance Agency in North Dallas; and The Bailey-Thompson Insurance Agency of Garland. TCT's president, Brook Crawford, will manage Guaranty's Dallas insurance operations.
Guaranty Insurance Services has revenues in excess of $50 million, and operates offices in seven Texas cities and in the greater Los Angeles area. It provides retail property/casualty insurance, risk manage-ment, annuity brokerage and life and health insurance. Guaranty is part of Guaranty Financial Services, which also owns savings institutions in Texas and California. It, in turn, is owned by Temple-Inland, a New York Stock Exchange-listed company with operations in corrugated packaging and forest products.
Hilb Rogal & Hobbs (HRH) (www.hrh.com) acquires substantially all the assets of Casey, Wolfe & Martin, Inc., of Dallas:
Casey, Wolfe & Martin has annual revenues of approximately $1.5 million. The agency's principals and staff will merge into HRH's existing Dallas operation under the leadership of Patrick J. Bonds, president of that office, and William L. Chaufty, central regional director.
Marsh (www.Marsh.com) acquires Hinckley Marine Insurance, LLC, a Maine-based yacht broker:
Hinckley Marine Insurance, LLC (HMI), is a yacht insurance broker with offices in Southwest Harbor and Yarmouth, Maine; Newport, Rhode Island; and Stuart, Florida. Established in 1948, HMI serves clients throughout the United States and world. HMI was an operating company of The Hinckley Company, a firm primarily known for the production of high-quality yachts.
Lee Judd, president of HMI, will continue to manage yacht insurance groups within Marsh's Private Client Services practice. Marsh will maintain Hinckley's operations in Maine and at its other locations.
USI Holdings Corporation (www.usi.biz) acquires four firms:
O'Leary-Kientz, Inc., of Cincinnati, Ohio, a construction & surety specialist; Diversified Insurance Services, Inc., of Chicago, an employee benefits firm; Dodge, Warren & Peters (DWP) of Los Angeles (expected to close in first quarter); and The Benefits Team (TBT), of Houston, Texas, an employee benefits firm (USI acquired substantially all the operating assets)
O'Leary-Kientz, established in 1980, will be fully integrated with USI's existing Cincinnati operation and is expected to contribute approximately $4.5 million in revenues to USI over the next 12 months. Thomas W. Chatham, president and CEO of O'Leary-Kientz, will assume the new role of president of USI Midwest's commercial division and join the management team of USI Midwest.
Diversified Insurance Services, established in 1985, provides group and individual employee benefits to middle market clients. Patrick Moore, president and CEO of Diversified will assume the role of senior vice president and client manager for USI Insurance Services of Illinois. This acquisition will be integrated with USI's existing Chicago operation and is expected to contribute $800,000 in revenues in the next 12 months.
Dodge, Warren & Peters Insurance Services, Inc. (DWP), established in 1977, offers a range of insurance products and services--both property/casualty and employee benefits--through four southern California offices. DWP will be combined with USI's existing Southern California operation and is expected to contribute approximately $25 million of annual revenues to USI.
The Benefits Team (TBT) has been providing employee benefits to middle market clients since 1996. TBT will be integrated with USI's existing Houston operation and is expected to contribute approximately $2 million of revenues to USI over the next 12 months.
Willis Group Holdings Limited (www.willis.com) acquires the assets of Vision Insurance Group of Montgomery, Alabama:
Vision Insurance Group, which had revenues of $3 million in 2003, provides commercial lines insurance and employee benefits brokering and risk management services. Willis will extend employment agreements to several Vision associates while Vision will continue operations under a long-term, sub-broker agreement with Willis.
Vision, founded in 2000 by Bruce W. Hodges, serves medium- and large-sized clients in a range of industries, including news and entertainment, airline, recreation, technology, commercial rental property, manufacturing, construction and transportation. *