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2021 brokerage revenue: $3.23B
Percent increase: 19.6%
A combination of strong organic growth and an acceleration in the number of acquisitions it completed helped Hub International Ltd. grow its revenue by nearly 20% last year.
Investments in technology, both through acquisition and internal development, should fuel further growth with customers that want to interact digitally with brokers, its top executive said.
Chicago-based Hub’s brokerage revenue grew 19.6% to $3.23 billion in 2021, compared with the more modest 12.8% revenue increase it reported a year earlier. Hub retained its position at No. 5 in Business Insurance’s ranking of the world’s largest brokerages.
Last year, “by every metric that brokers are measured by, was a historical best for Hub,” CEO Marc Cohen said. Hub had high single-digit organic growth in 2021 and double-digit organic growth in this year’s first five months, according to a company spokeswoman.
The brokerage completed 72 acquisitions last year, compared with 65 in 2020.
Last year was a “record-setting year for M&A, and we are off on an equally good start in 2022,” Mr. Cohen said. “The pipeline is robust. We’ve stayed very disciplined in our M&A strategy to focus on acquisitions that support existing strategies and help us to create new ones.”
The acquisitions largely are a mix of small fold-ins and dominant local independent agencies, Mr. Cohen said.
“For us, it’s really looking for organizations that have strong leadership, that fill geographic kind of voids for us around North America, that bring distinct products and expertise to Hub and that also want to take their organizations to a higher level by taking advantage of everything that Hub has to offer,” Mr. Cohen said.
“Our M&A strategy really is focused on supporting existing business strategies and creating new business strategies,” Mr. Cohen said. Five years ago, he said, Hub began to build its retirement and wealth management division, supporting it with strong acquisitions.
“That helped us to ultimately grow that business organically and helped us cross-sell to existing clients,” he said. Hub followed the same strategy in Canada, and with its managing general agency and wholesale business, he said.
In addition, Hub recruited additional employees and promoted staff internally, he said.
Hub puts an emphasis on cooperating across its specialty verticals and using the best resources, specialists and expertise “wherever they fit throughout Hub,” he said.
Michael Dion, vice president and senior analyst with Moody’s Investors Service Inc. in New York, said that while the brokerage is privately held, employees own a “meaningful share” of the company, which creates a “sense of pride among its producers.”
A key area of development this year has been the expansion of its digital capabilities.
In March, Hub teamed with insurtech Bold Penguin to buy online agency Insureon, which launched in 2011 and offers various lines of coverage to small businesses, including business owners policies, general liability, auto liability, workers comp, and errors and omissions.
In June, Hub launched VIU, a digital platform for personal lines coverage such as home and auto insurance.
Insureon “gives us the capability to interact with customers who want to communicate and transact in a digital way for their insurance needs,” Mr. Cohen said. “It is an important strategic evolution for us within our organization,” he said.
“We want to make sure that what we are bringing to our customers is a very different, efficient, modern insurance experience that’s unbiased.”
Hub has been majority owned by San Francisco-based Hellman & Friedman LLC since 2013.
“The relationship is outstanding,” Mr. Cohen said. “They are very supportive of us from both an M&A standpoint and an organic growth standpoint, and at this time there are no conversations regarding a change in that management control.” Atlas Partners LP acquired a minority stake in the brokerage in 2018.
“With their private equity sponsors, I think they will continue to grow” and “may be the buyer of choice” with some sellers, said Timothy J. Cunningham, director at Optis Partners LLC, a Chicago-based investment banking and financial consulting firm.
This would be the case “where there’s an alignment of interest with the additional products and services that Hub delivers to that particular seller,” Mr. Cunningham said.
2021 brokerage revenue: $19.86B
Percent increase: 15%