Brokers get operations benefits when acquired by big carriers

Takeaways:

• Gallagher exec says acquisition targets get more operations tools
• Consolidating personnel and engagement data can yield new insights
• Brown & Brown brokerage finds similar operational benefits

Aside from adding distribution channels, large insurers' acquisitions of smaller brokers and agents can consolidate data and improve operational efficiency, according to executives engaged with these actions.

Gallagher, the London-based global reinsurer, broker and advisor, has been scooping up companies on a regular basis, including Surescape Insurance Services and Tompkins Insurance Agencies in November, Bremer Insurance Agencies in September, and MACK Insurance Services in August, as well as closing its acquisition of AssuredPartners in August.

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"Our number one mantra is don't break the business. We have all this wonderful talent, great people, that we acquire, and the worst thing you can do is shake it like a snow globe," said David Bauer, vice president of mergers and acquisitions at Gallagher, speaking in a webcast hosted by Reuters last month. "We want merger partners to continue serving their clients, their markets and their employees. We want to give them more tools. Some carriers believe that, because there's an acquisition, we're going to try to move that business to specific carriers. That's not what we do."

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Acquisitions of brokers ends up making data – especially information on contacts with policyholders – more widely available, according to Anna Kodryanu, SVP, distribution, Westfield Specialty Insurance, speaking in the Reuters event.

"The data piece is really important, because a lot of the broker firms now have data available where they can consolidate it and see who's working in what spheres, so that the appointments that we make, the engagements that we try to facilitate, are worthwhile and relevant and meaningful, to be productive to both sides, not just the carrier," she said. "We try to engage to see where are the pockets of opportunity – where can we help make your lives easier."

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Carriers acquiring brokers tend to make back-office functions more efficient, according to Christopher Keegan, senior managing director at Brown & Brown, an insurance brokerage, speaking in the webcast. As Brown & Brown itself grew through acquisitions, he said, human resources, technology and other functions were consolidated. Conversely, Brown & Brown's acquired companies got more tools and services that could be distributed, Keegan added.

Generally, removing tasks such as comparing policies, reviewing contracts and invoicing creates opportunities to focus on more impactful functions, Keegan said. These include risk assessment, pricing and product innovation, as well as expansion of business relationships and depth of services provided, according to Keegan. 

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Vantage, an underwriting technology company, saw Gallagher's acquisition of its client, commercial insurer Woodruff Sawyer, as an opportunity, according to Leanne Berry, chief distribution officer at Vantage. She expects more combinations of insurers and brokers to come, largely joining carriers with regional brokers. "I don't see any of that slowing down in 2026," she said.