Since buying Acordia Inc. in 2001 and creating the nation's largest bank-owned insurance agency, Wells Fargo & Co. has not been a big player on the agency acquisition scene-but that should change, thanks to the deal-minded focus of the agency's new head.Acordia intends to further tie itself to its San Francisco bank parent through continued cross-selling and acquisitions in the bank's West Coast stronghold, according to the agency's new chief executive officer, Kevin W. Conboy.
"Acquisitions have always been an important part of Acordia's business strategy since the company was founded," says Conboy, who became president and CEO of the Chicago-based insurance agency on March 1. "It's going to continue to be an important part of our go-forward plan as it relates to our association with Wells Fargo."
Conboy, 53, succeeds Frank Witthun, 59, who assumed the duties of nonexecutive chairman of Acordia.
Conboy, a 17-year veteran of Acordia and a predecessor company, said the agency-whose presence has been concentrated in the Eastern part of the United States-would try to fill out its operations in areas where Wells does much of its banking. "We have a keen desire to focus on areas where the bank has significant market share," he says. "Certainly the West Coast is No. 1 in our target markets."
A Dealmaker
Acordia is not targeting specific types or sizes of acquisitions because "most acquisitions are opportunistic," Conboy says. Acordia would look for deals where the agents in the firm have the "discipline, energy, and vision" to take advantage of the sales opportunities inherent in being part of a large banking company.
Though Acordia remains the largest bank-owned insurance agency in the country, it has not been as active an acquirer of late as some other top banking companies' insurance operations, BB&T Corp., for example.
In April 2001, after the Wells Fargo deal was announced but before it closed, Acordia bought Casper, Bartholf & Associates Inc., an insurance brokerage in Springfield, Ill. In December 2001, Acordia bought H&R Phillips Inc., a single-office agency in New York. Other than those deals, Acordia-which has bought more than 80 agencies since 1994-has remained mostly on the sidelines.
"On the acquisition side right now, it's probably the most competitive environment that I've ever seen, primarily driven by the fact that there are many more buyers in the marketplace than there had been," Conboy says.
"Before Wells got into the picture, (Acordia was) very active as a buyer, and when the Wells deal closed, they continued to prospect," says John Wepler, executive vice president at Marsh, Berry & Co. Inc., Concord, Ohio. Now that Wells has owned the agency for more than a year, "we'll see a lot more out of Acordia," he predicts.
Wells Fargo reported that insurance revenues grew 34%, to $997 million, last year, which it attributed in part to Acordia's contribution. Wells also sells personal lines insurance directly through Wells Fargo Insurance in Minneapolis.
Acordia last year exceeded the cross-selling opportunities that Wells had set out when the deal closed, Wepler says. The agency plans to continue focusing on cross-selling, he adds. Acordia has installed a customer relationship management program that lets it link its customer data base with the bank's to turn up sales opportunities.
Not only is there remaining potential to sell insurance products to banking customers, Conboy says, but also many agency customers are good prospects for bank products.
"We're pretty disciplined about the customers that we're targeting," he explains. "We don't want to spend a tremendous amount of time on a target audience where the opportunity to cross-sell is limited."
Acordia is focusing on specific industry groups, as well as on customers that have already bought multiple products from the bank. "Wells Fargo has had a great cross-sell culture long before Acordia came into play," Conboy says, and the agency intends to build on that.
Conboy was in charge of the East region for Acordia before becoming chief operating officer last June. He joined Acordia in 1993 when the firm bought American Business Insurance, where he was president and chief executive officer of its Northeast division.
This article first appeared in American Banker, a Thomson Media publication. It has been edited for this publication.
