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2020 brokerage revenue: $1.97B
Percent increase (decrease): 9.2%
Acrisure LLC has continued its breakneck acquisition strategy while juggling a move to a new headquarters, changes in the C-suite and a continued drive toward making technology a cornerstone of its business.
The brokerage has already closed or signed letters of intent for more than 85 acquisitions since the start of the year and is on pace to eclipse the 110 acquisitions that closed in 2020, CEO Gregory L. Williams said.
The 2020 deals helped Grand Rapids, Michigan-based Acrisure grow its brokerage revenue 9.2% to $1.97 billion and move up one notch to No. 9 in Business Insurance’s ranking of the world’s largest brokers.
A key transaction was its July 2020 purchase of artificial intelligence company Tulco LLC's insurance practice — the broker’s largest investment in a single asset at the time. The $400 million deal was a stock-for-stock trade, and Tulco became a significant minority shareholder in Acrisure.
Mr. Williams described the acquisition as “highly intentional” and a way to continue to leverage technology.
“We chose to deploy technology in a way that helps the human relationship side of our business. … It is transforming every facet of our business,” he said.
“In the P/C industry itself, there’s more discussion today about value chain compression than there has ever been, there’s more talk about tech deployment than there has ever been,” Mr. Williams said. “Those that have deployed (technology) thoughtfully are going to have a differentiated capability.”
“They’re one of a small handful of companies that have made certain investments that are more forward tech-oriented,” said Chris Scott, New York-based assistant vice president at Moody’s Investors Service Inc. “That’s not to say that they are the only broker doing that, but I think they’re in a small group of brokers that have made initial strides to implement artificial intelligence more broadly within their organizations.”
In 2020, the brokerage also rebranded Beach & Associates Ltd., which it acquired in 2018, as Acrisure Re and Acrisure London Wholesale. Grahame Millwater, who joined Acrisure via the deal, was recently named of head of global insurance.
Mr. Williams said that through the London-based reinsurance unit Acrisure has “been able to quickly replenish and bring capacity to any market that we’ve needed to. The Acrisure Re folks have stood very tall as it relates to helping us as a brokerage firm.”
Like much of the industry, Acrisure’s organic growth in 2020 was flat. That can be partially attributed to its target market segment of small and middle-market companies that were “impacted by rate and exposure,” said Joe Marinucci, New York-based senior director at Standard & Poor’s Global Ratings. “There were some accounts that didn’t make it or had to scale back on exposure units, and as a result, (Acrisure’s) potential to achieve positive growth was impacted by that.”
“(Last year) was a tough year to go out and grow business organically, and we knew it was going to be,” Mr. Williams said. “This year, we rebounded nicely. If you look at the last two months, basically we averaged double-digit organic growth.”
Acrisure is on track to exceed its approximately 5% organic growth average each year for the past five years, excluding 2020, he said.
The brokerage is amid some changes this year. In late summer or early fall, Acrisure will move into its new Studio Park headquarters in Grand Rapids and is expected to announce a new chief financial officer soon.
In April, Acrisure’s CFO Matt Schweinzger stepped down when another company where he serves as a principal, JJMT Capital LLC, was connected to an alleged Ponzi scheme. JJMT and Mr. Schweinzger are not accused of wrongdoing. Mr. Schweinzger, who also served as chief acquisitions officer, will continue at Acrisure in an advisory role. The brokerage has since appointed two interim co-CFOs, Sozon Vatikiotis and Kent Snyder. A company spokesman said the CFO role will be filled “with a full-time person soon,” but that the chief acquisition officer position would remain open for now.
While the situation is “unfortunate,” Acrisure’s strategic growth has appeared unaffected by the change, Mr. Marinucci said. “They have a plan to incorporate (artificial intelligence) to enhance their competitiveness and seek out potential new avenues for growth.”