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Top insurance brokers, No. 6: BB&T Insurance Holdings Inc.

John Howard

2018 brokerage revenue: $2.02B

Percent increase (decrease): 5.1%

A major merger involving its banking parent could provide new growth opportunities for BB&T Insurance Holdings Inc. as it accesses a swathe of potential new insurance customers, the brokerage’s senior executive and analysts say.

The potential new business to be derived from the merger between BB&T Corp. and SunTrust Banks Inc., which is due to close later this year, will be in addition to already robust organic growth reported by the brokerage.

BB&T Insurance moved to sixth position in Business Insurance’s 2019 ranking of the world's largest brokers with $2.02 billion in brokerage revenue, a 5.1% increase over the prior year.

The bank-owned broker added 540 jobs in 2018 to reach 7,240 staff across 135 offices, up from 107 in 2017, according to BI data.

Once the bank merger is completed, the combined entity will be named “Truist,” and will be the sixth-largest U.S. bank holding company.

All the insurance brand names will remain, said John Howard, chairman and CEO of BB&T Insurance Holdings, with change limited to the “top of the house” when BB&T Insurance Holdings, which houses the insurance operations, becomes Truist Insurance Holdings.

Retail brokerage operations continue under the McGriff Insurance Services brand, which was introduced following the acquisition of Regions Insurance last year.

“SunTrust does not have a comparable insurance business, so we see this as being a really attractive opportunity for our insurance business,” Mr. Howard said.

The combination could increase cross-selling opportunities for the insurance brokerage operations, said Brian Klock, managing director for Keefe, Bruyette & Woods Inc. in Boston, extending insurance sales to the integrated SunTrust customer base.

“The organic growth in their insurance business is going to be focused on how they can first integrate both companies and then can they cross-sell to some of it,” he said.

Mr. Klock notes that insurance brokerage makes up 23% of pro forma fee business of $8 billion for the combined entity, which is roughly equivalent to BB&T’s 2018 insurance revenue.

After 6% organic growth during 2018, BB&T Insurance Holdings improved to 6.7% organic growth during the first quarter of 2019, Mr. Howard said.

Market conditions are “more challenging (for buyers) this year than they were last year,” Mr. Howard said, and rising rates are reflected in the broker’s organic growth.

“Their peer group, by our standards, organic growth was about 4.4%,” for 2018, said John Wepler, chairman and CEO of Marsh, Berry & Co. Inc., a Woodmere, Ohio-based merger and acquisition advisory and consulting firm to the insurance sector.

The acquisition of Regions Insurance Group Inc. in April 2018 added $46 million in revenue to the insurance operations, Mr. Klock said, accounting for some of the unit’s overall growth from roughly 16% of revenues previously.

Regions also expanded BB&T geographically, Mr. Howard said, giving the brokerage a presence in Arkansas, Louisiana, and Indiana. The Regions integration is complete, he said. “The system conversions are complete and all of the rebranding has taken place.” Mr. Wepler said the brokerage has invested significantly in technology.

“They’re leaning into technology a lot more than most in the industry, and I think it has to do with the fact they have a strong, stable, long-term capital partner,” Mr. Wepler said. “They did not buy off-the-shelf software. They built a proprietary system that would meet their needs.”

Acquisitions should continue, according to Mr. Wepler. “They’re acquisitive, but they’re not just rolling up $5 million and $10 million shops. They’re looking at finding those firms with a strategic fit.”

Mr. Klock said there is a decreasing supply of bank-owned insurance brokerages to serve as potential further acquisition candidates for BB&T.

“Our focus isn’t only on bank-owned insurance businesses,” Mr. Howard said, adding that BB&T has acquired brokerage businesses from “a variety of forms of ownership.”

“BB&T has been in the insurance business for many, many years,” Mr. Wepler said. “It’s been core to their business model since the beginning, they believe in it and it’s part of their culture.”

“We’ve more than doubled the size of BB&T’s insurance business in the past seven years, and with the upcoming merger of equals, will provide us with even greater growth opportunities in the future,” Mr. Howard said.






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