Cornerstone Risk Group recently announced the acquisition of Toowoomba based PMA Trilogy Insurance Solutions. The acquisition was the third by Brisbane-headquartered Cornerstone in three months.
“To be able to bring in a business like Geoff’s [Geoff Boyle, PMA’s former owner] that was so closely aligned to ours, it just made sense,” said Cornerstone’s director, Scott Mitchell (pictured above).
The acquisition, said Mitchell, forms part of a growth strategy concentrating on regional Queensland.
“Think of it less as being Brisbane/Toowoomba,” he said. “Think of it more as the southeast pocket and regional Queensland.”
Mitchell, whose firm is an authorised representative (AR) of Resilium Insurance Broking, said he wants to invest in the regions.
“I see so much value, for example, in the business up in Emeralds where we bought Central Highlands [Central Highlands Insurance Services],” he said. “It’s not a big business but it’s a tremendous and well-run business.”
Mitchell said his firm is also buying businesses in Brisbane, but the PMA acquisition in Toowoomba and Central Highlands in the Emeralds is “about getting more business in the regions.”
Both PMA and Cornerstone are firms focused on the SME space in the agricultural sector.
“Cornerstone is an SME general insurance brokerage,” said Mitchell. “Our key focus is working on the most effective and efficient ways to assist commercial agricultural business clients with their general insurance and risk management needs.”
Mitchell has an insurance background closely linked to the agriculture industry.
“I was a 21-year-old kid and just wanted to get out of Brisbane,” he said.
The youngster landed a job as an insurance agent in Moree, then Roma and worked on portfolios in western Queensland. “That’s how I got my start in insurance,” he said.
Mitchell said he knew Boyle before acquisition conversations started about a year ago.
“I had the benefit of knowing Geoff for a while prior to commencing discussions regarding the potential purchase of PMA,” said Mitchell. “I had the insight of knowing the type of operator he was and the type of man he was.”
Soon after signing the non-disclosure agreement (NDA) with the PMA boss he realised the businesses were also very similar.
“We had the same values, we looked after the same types of clients with the same core focus on that SME space,” he said.
PMA was also the biggest of Resilium’s ARs in the Darling Downs district.
“We’d actually bought another business in Toowoomba in 2019 called Down’s Financial Services, or DFS,” said Mitchell. “So that was our first foot in the door of the Darling Downs.”
The next logical step, he said, was looking to do a deal with PMA. The fact that both companies were ARs of the same company also made the acquisition smoother than it might have been.
“We had access,” said Mitchell. “So to get the data required to complete one of these [acquisition] transactions, if you’re dealing with someone outside the network, then it is a lot harder to get there.”
Once Mitchell and Boyle knew a deal was going through they could start organising the smaller but important parts of the transaction.
“Things like IT, systems, templates and manuals,” said Mitchell. “We introduced them to the PMA staff and the teams as early as we possibly could so that when completion occurred, they were already across this the way Cornerstone operated, and likewise, we were across the way that they operated.”
Read next: Ausure announces Tassie merger
The Cornerstone MD said “getting those things right early in the transaction” helped make the whole process easier.
Once “critical details” were worked out, he said, it was just a case of bringing the two businesses together and working through with lawyers on contracts.”
One of the challenges of the process was integrating a newer business, like Cornerstone’s, with PMA, that was founded in the 1980s.
“I suppose there are efficiencies in Cornerstone, being a younger business, that a legacy business like PMA hadn’t quite adapted to yet,” said Mitchell.
However, he said, despite the fact that Boyle’s business “had been running well for a very long time”, he enjoyed the process of helping PMA find new efficiencies.
The economic slowdown and inflation haven’t stopped Cornerstone’s ongoing acquisition strategy.
“It’s something I’m cognizant of,” he said. “We are very careful to acquire businesses that are the right fit and align with our strategic objectives.”
However, he added that recent times have demonstrated that insurance broking is an “extremely resilient business.”
“We’re confident in our ability to adapt and grow despite the challenging economic conditions,” said Mitchell.
