Hub International Limited (Hub) has been on a sweet run of North American acquisitions since the New Year.
It has dominated M&A headlines with multiple swoops in Massachusetts (TYG Insurance and Leitao Insurance Agency), the purchase of multi-line insurance brokerage Der Manouel Insurance & Financial Services, Inc. in California, and the acquisition of Desilets Insurance Brokers in Manitoba.
The mega-brokerage is “strategically focused on expanding its retirement services division through M&A,” explained Mike Barone, president of Hub International’s Employee Benefits practice.
This is evident via Hub’s acquisitions of Pointbreak Consulting Group, an employee-benefits and pension consulting firm headquartered in British Columbia, as well as Ontario-based GMS Insurance which focuses on retirement and employee benefit needs, and Utah-based employee group benefits firm Spectra Management.
Hub’s list of newly acquired partners goes on. The organization has an appetite for growth and investment, and it’s always on the look-out for firms who would be a good cultural fit for the Hub family, Barone explained.
“We have a wide appetite for high quality firms who are a good cultural fit and who want access to tools and resources to grow,” he told Insurance Business. “The cultural fit stems from why the company is selling. Does the existing management team want to stay on and grow the business? Are they committed to the mid-market, and are they looking for access and tools to aid growth? Those are the things Hub’s looking for.
“Hub is a very connected organization from desk level up through regional and national management. Communication flows readily throughout and we try to align incentives within the workforce. We have a shared resource model, where different offices have the same value proposition and ability to access talent regardless of geography.”
As well as expanding its retirement services division, Hub is also interested in wholesale insurance markets like real estate, healthcare, transportation, construction, hospitality and financial institutions, according to Barone. Hub’s consolidation intentions are quite clear, but what are the benefits for other firms in joining the big organization?
Barone’s own insurance company was acquired by Hub five years ago after growing to over $20 million in revenue and 110 employees. He commented: “We felt we needed to align ourselves with a much larger organization who had broader depth and breadth of resources and capabilities to meet current and future client demands.”
According to Barone, smaller firms need to assess the market, look at the amount of investment that firms like Hub are making, and ask:
“Can we continue to be highly competitive without forming an alliance with a larger organization who is investing significantly?”
