Hub International Ltd. continued its streak of organic growth in its U.S. insurance brokerage operations in 2012 and is well-positioned for recapitalization or to go public again.

Hub's brokerage revenue increased 12.6% in 2012 to $988.7 million, making the Chicago-based brokerage No. 10 in the 2013 Business Insurance ranking of the world's largest brokers.

Hub has a “very strong” top management team that is “highly respected,” said John Wicher, principal at John Wicher & Associates Inc.in San Francisco. “Their footprint is clearly in the middle market here'' in the United States. “They do a good job with that.”

In 2012, Hub completed 29 mergers and acquisitions, a trend that is expected to continue, said Kevin P. Donoghue, managing director at Mystic Capital Advisors Group L.L.C. in New York.

“They're probably the most acquisitive out there,” Mr. Donoghue said.

Hub grew organically in 2011 in its U.S. operations for the first time in several years and “that trend has continued and, in fact, has accelerated,” said Martin P. Hughes, chairman and CEO of Hub.

Hub's 2012 organic growth was 3.3%, and 4.8% in the first quarter this year.

While U.S. organic growth improved, such growth in Canada, which represents 35% of the brokerage's revenue, flattened in 2012 even though the Canadian operations were “fabulous performers” from 2008-2010, Mr. Hughes said.

Some $117 million in 2012 revenue came through acquisitions, Mr. Hughes said.

Mr. Wicher described Hub's acquisition style as “selective but very aggressive.”

%%BREAK%%

Hub's purchase of São Paulo-based Harmonia Corretora de Seguros Ltda. in December 2011 expanded brokerage's operations into Latin America.

“I think the deal they completed in Brazil was important,” Mr. Wicher said. “It gives them a platform for growth in Latin America. Clearly, they want to grow internationally.”

While Hub made no acquisitions outside of North America in 2012, “our expectation is we will do more in 2013 in Latin America,” Mr. Hughes said.

The brokerage is focusing on employee benefits and wellness programs, which are fundamental to its strategy, Mr. Hughes said.

To that end, Hub in January acquired Intercare Insurance Solutions Inc., a San Diego-based employee benefits brokerage.

In the past, employee benefits brokers interacted with human resource managers, Mr. Hughes said.

“Today, CEOs want to talk about health care, they want to talk about wellness initiatives, and they want to know that you've got the capability to implement wellness initiatives,” he said.

“Intercare is a 100% employee benefits brokerage who has focused on wellness initiatives. They have the call center and they have the historical data to demonstrate to people what they can expect if they buy into the holistic approach,” Mr. Hughes said.

Also bolstering its employee benefits efforts, Hub in April hired Ronald Agypt as Chicago-based chief sales officer of employee benefits, with responsibility for leading the brokerage's overall employee benefits strategy.

In the new post, Mr. Agypt reports directly to Mr. Hughes and will focus on voluntary benefits and ancillary insurance products.

“He is reporting directly to me because we feel this is a huge opportunity for us,” Mr. Hughes said. “It has the ability to significantly transcend any losses that we might take because of health care legislation.”

%%BREAK%%

Hub reverted to private ownership in 2007 after it was purchased by Apax Partners L.L.P. and Morgan Stanley Principal Investments Inc., the brokerage's current owners.

There has, however, been speculation within the insurance brokerage industry that New York-based Marsh & McLennan Cos. Inc. had an interest in acquiring Hub.

While Mr. Wicher said he had no knowledge of Marsh's interest in the brokerage, given Hub's footprint and middle-market business, “an acquisition of Hub ... would be very complementary for Marsh.”

Hub did not respond to a request for comment on the industry speculation.

“One issue with Hub, of course, is that their investor group has been there for five years,” Mr. Wicher said, noting that he expects some type of event — either a recapitalization or an initial public offering — within the next year.

“I'd think that billion-dollar revenue has got to be in their sights” for Hub to go public in the near future, Mr. Donoghue said.

But if conditions don't come around, Hub could flip to another private equity fund, he said.

“We're closely looking at what's going on in the marketplace; we're closely looking at that opportunity or alternatives all the time,” Mr. Hughes said in referring to a potential IPO. “But we haven't started the process yet.”