The fifth largest broker in the US may boast a long and celebrated history, but BB&T Insurance Holdings is not resting on its laurels and is instead spending its 95th year in business by seeking out opportunities to further grow its operations.
BB&T Insurance’s US brokerage revenue reached almost $1.7bn in 2015, and last year, the firm strengthened its position by acquiring Swett & Crawford from Cooper Gay Swett & Crawford for $500m in cash.
Swett & Crawford is expected to add more than $200m to BB&T Insurance’s annual revenue, with the newly acquired business set to play a significant role within its wholesale property and casualty broker and managing general agent CRC Group.
By the end of 2016, BB&T Insurance’s business was split 53% wholesale broking and 47% focused on the retail market. The company’s approach means it does not force its wholesale and retail businesses to work together.
After spending $500m on the Swett & Crawford acquisition, John Howard, the chairman and chief executive of BB&T Insurance, told Reactions his firm is focused on organic growth, which it hopes to supplement with acquisitions.
“We have a consistent focus on organic growth which we will supplement through acquisitions when we find businesses that are a nice complement to our existing platform,” Howard said. “This year, we envision generating organic growth within challenging market conditions, and the business will also benefit from the contribution of Swett & Crawford.”
One way Howard envisions growing BB&T Insurance organically is by taking advantage of its parent company’s wide-reaching US operations.
BB&T has acquired banks in eastern Pennsylvania over the last couple of years, and as Howard explained, that will provide BB&T Insurance’s retail business with an opportunity to serve clients in that region and New Jersey. Elsewhere, BB&T Insurance has initiatives underway surrounding the Affordable Care Act and life insurance distribution.
“Our clients can benefit from our advice, and we have major initiatives around employee benefits and life insurance through our different distribution channels,” said Howard, adding: “Both of these are long-term initiatives that performed well in 2016, and we have high expectations for them in 2017. We also have a new initiative to develop data analytics to streamline the placement of insurance, while continuing to provide the high level of expertise and market access that our clients expect.”
Like other market players, the tough trading conditions have impacted BB&T Insurance, but Howard believes the diversified nature of his firm along with the financial strength of its parent means it can work through the difficulties currently impacting the sector.
“As significant overcapitalisation for insurance carriers continues, there is greater demand for effective and efficient distribution. Through our retail and wholesale businesses we can, and do, provide access to a very diversified mix of business. We are well diversified across business units, geographies, industries, niches, clients, carriers and markets,” explained Howard. “With that diversification, there will be some components that perform better than others, but we are positioned for strong performance throughout the market cycle.”
This diversification certainly helps BB&T Insurance, but Howard also highlighted that the business boasts a lengthy history and has overcome industry challenges in the past.
“This is the 95th anniversary of BB&T Insurance, and the 145th anniversary of BB&T Corporation, so we have a long and distinguished history. We’ve traded through a wide range of economic cycles, business cycles, and political turmoil, so we are positioned well for the current environment. We provide stability to our associates which gives them confidence to serve their clients, and we’re able to invest throughout the business cycle so we’re always developing and enhancing our capabilities to be able to better serve our clients.”
Despite the industry headwinds, BB&T Insurance anticipates organic growth in 2017. Boosting industry-leading retention on top of strong levels of new business will allow the firm to overcome any difficulties.
Future acquisitions could also be in the cards should they prove attractive enough.
“The opportunity is certainly there to continue to build,” stated Howard. “We provide a long-term solution versus the short-term approach of private equity-backed organisations. We believe this allows us to provide unique value to our clients, carriers and associates.
“We have a strong parent company, a strong balance sheet and we know this space very well. We have an incredible track record of successful acquisitions and integrations, and we are always looking at new opportunities and determining whether they would benefit from being a part of our platform.”