REVENUES JUMP 24% DESPITE TOUGH ODDS OF MARKET

Amid a soft, competitive market, the ranking of the Top 100 brokers of U.S. business did not always reward significant revenue gains.

Despite an increase in their U.S. brokerage revenues, 34 brokers slipped lower in the chart this year, a dramatic change compared with last year, when only 15 brokers declined in rank despite increasing their revenues.

Some of the ironic 1997 drops include Riedman Corp., with revenues up 15% but ranking two spots down at No. 24.; Wm. Rigg Cos., with revenues up 12% but ranking four spots down at No. 43; and Frank Crystal & Co. Inc., with revenues up 11% but ranking two spots down at No. 20.

Ten brokers reported declines in U.S. brokerage revenues, the same number that reported declines on last year's Top 100 chart.

For its ranking, Business Insurance defines U.S. brokerage revenues as revenues generated from U.S. clients. The total revenues reported by the Top 100 brokers of U.S. business increased 23.9% to $9.76 billion in 1997.

The 1996 revenue growth by a similar, though not identical, group of brokers was 7.3% (BI, July 21, 1997). Also, last year's total revenues of $10.3 billion included revenue from corporate investment income and some non-brokerage services, which now are excluded from the ranking.

The criteria for ranking the Top 100 brokers this year is different from previous years. Rather than ranking companies based on gross revenues generated from U.S.-based clients, as in past years, the chart ranks companies based on total brokerage revenues generated from U.S.-based clients.

Brokerage revenues include gross revenues generated by insurance brokerage, consulting and related services, including interest income on funds held in a fiduciary capacity, such as premiums. Excluded is any income from underwriting, investment management services or businesses unrelated to risk management and employee benefits.

The amount of estimated U.S. revenues necessary to make the ranking of the 100 largest brokers of U.S. business fell 5% to $9.6 million. This decrease may be partially due to the soft market and four acquisitions of Top 100 brokers, but the change in criteria also is a factor, because it caused many companies to exclude a small portion of their total revenue that was formerly included for the ranking.

Commerce National Insurance Services Inc. made the most significant climb on this year's Top 100 chart -- up 19 spots, to No. 39. Commerce National had $24.5 million in 1997 U.S. brokerage revenues, up 67.6% from 1996, after acquiring Associated Insurance Management Inc. of Haddonfield, N.J., and Joseph J. Reinhart & Associates of Cherry Hill, N.J.

Summit Global Partners Inc. leaped 17 spots to No. 29 with the most significant revenue increase -- 93.5% -- of any company on the chart. Summit's higher brokerage revenues of $37.4 million reflect four acquisitions in 1997: Century Financial Services of Boca Raton, Fla.; NOEL/GREAVES Inc. of Dallas; Richards Insurance Agency of Temple, Texas; and Specialist Insurance Services Inc. of Houston.

Cal-Surance Associates Inc. and The Tribus Cos. each jumped 15 spots, to No. 54 and No. 58, respectively, while BB&T Insurance Services Inc. and Posse Walsh Buckman Van Buren Inc. each jumped 14 spots, to No. 16 and No. 84, respectively.

Several other companies made significant revenue increases but less dramatic jumps in the ranking. Norwest Insurance Inc. produced $126.9 million in 1997 U.S. brokerage revenues, up 62.4% from 1996, but ascended only two spots to No. 9 due to its beefy competitors. Aon Corp. -- which maintains the No. 2 spot -- produced $2.3 billion in 1997 U.S. brokerage revenues, up 65.8% from 1996.

USI Insurance Services Corp. and The NIA/Kornreich Group also made impressive gains -- 45.8% and 33.8%, respectively -- amid the challenging front-runners. USI maintained its spot at No. 7 and NIA/Kornreich ascended six spots to No. 22. Meadowbrook Insurance Group also performed well this year, moving up nine spots to No. 18 with a 32.8% revenue increase.

Two new arrivals to the chart were carried by major revenue climbs. Anchor Pacific Underwriters Inc., aided by the purchase of Pacific Heritage Administrators of Portland, Ore., made its debut at No. 61. Anchor Pacific had $15.6 million in 1997 U.S. brokerage revenues, up 62.3% from 1996. Old Kent Insurance Group did not submit a questionnaire last year, but it moved into the No. 72 spot with $13.1 million in 1997 U.S. brokerage revenues, up 52.3% from 1996.

Several other companies that appear on the Top 100 chart this year did not submit a questionnaire last year. The newcomers include The Leavitt Group at No. 36, Sullivan & Curtis Insurance Brokers at No. 56, and W.A. Lang Co. at No. 85.

Following Anchor Pacific's example, some companies that nearly qualified last year were able to push their way onto the chart this year. John Burnham & Co. entered at No. 83 after acquiring K&M Inc. of San Diego and the San Diego office of Lawrence United Corp. Bolton & Co. appeared at No. 86, The Simkiss Cos. at No. 98 and J. Rolfe Davis Insurance Agency Inc. at No. 99 after its acquisition of McGriff, Seibels & Williams of Orlando, Fla.

Saldana & Associates Inc., No. 51 this year, was not included on last year's chart because the company's brokerage revenues in Puerto Rico were not counted as U.S.-based.

Ten brokers reported a decrease in 1997 U.S. brokerage revenues, resulting in a drop in rank for all.

Due to the partial sale of its life division, Dann Insurance reported the most significant drop in rank: 21 spots to No. 97 after a 13.5% decline in U.S. revenue. Other brokers reporting declines in U.S. brokerage revenues include Calco Insurance Brokers & Agents Inc., down 6.4%; Robertson-Ryan & Associates Inc., down 5%; and Associated Agencies Inc., down 3.3%.

Several companies dropped off the chart after being acquired. Anderson & Anderson Insurance Brokers Inc. was acquired by Aon, Daniel James Insurance was acquired by Poe & Brown Inc., McCay Corp. was acquired by American Phoenix Corp., and UVW/Elizabeth Group L.L.C. was acquired by The NIA/Kornreich Group.

Clair Odell Group, formerly No. 82, and Richard N. Goldman & Co., formerly No. 89, slipped to No. 101 and No. 102, respectively, as a result of the aggressive competition.

Hobbs Group Inc., The Mathog & Moniello Cos. Inc. and Conseco Risk Management Inc. chose not to submit questionnaires this year and therefore are not on the chart.

Two networks of individually owned companies are not included in the rankings.

The 59 members of Assurex International combined generated $574 million in 1997 revenues, which would have made the Columbus, Ohio-based agency network No. 5 in the world.

The 54 franchises in independent agency franchise organization ISU Corp. combined made $131.7 million in 1997 revenues, which would have made the group the ninth-largest U.S. broker.