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View from the top: Robert L. Cohen, IMA Financial Group

Robert L. Cohen

Robert L. Cohen, chairman and CEO of Denver-based brokerage IMA Financial Group Inc., has recently seen it through some significant acquisitions. The privately held company, which is majority employee-owned, resulted from a merger of three brokerages in Kansas in the 1970s with the concept that it would offer clients claims and loss control services, in addition to insurance placements, which was unusual at the time. CEO since 1998, Mr. Cohen recently spoke with Business Insurance Editor Gavin Souter about the company’s acquisitions and the outlook for the market. Edited excerpts follow.

Q: The most prominent acquisitions you’ve completed recently were Bolton and Parker, Smith & Feek. What do they bring to IMA?

A: The premise was really around our strategic plan of looking at the marketplace and saying it needs a privately held, independent, employee-owned firm that allows us to attract and retain very top talent. One that’s very client-focused and provides unique services around deep-seated specializations. 

It’s built around organic growth. We believe the bigger you get, if you’re really based in value-added services, you ought to be able to not only sustain your organic growth, but you ought to be able to increase it. And then it’s a firm that’s investing in technology. 

Then what we’re looking for are like-minded partners. What we saw in Bolton and Parker, Smith & Feek, as well as Diversified Insurance and k.p.d. Insurance, were firms that were deeply committed to being independent, employee-owned and private. They were very committed to changing the client experience. They were committed to organic growth and really had built world-class sales and marketing, and they were investing in technology. So, the concept was let’s do it together as opposed to doing it separately. 

Q: What about the specializations that they bring? Do they diversify or build on specializations that you already have? 

A: The beauty of each one of the transactions is there was some overlap where we had specialties that got stronger. In Bolton’s case, they were very strong in education, but they did primarily K-12. We did primarily higher ed. So, when we come together, we have a specialization that’s K through higher ed. In k.p.d.’s case, they have logging and forestry, and that really helps strengthen what we were doing in the agricultural side. In Diversified’s case, they did growth entities and a lot of technology, so that really brought some capabilities to us. 

Parker, Smith & Feek is very big in construction, as are we, and so combined we’ve become a real force in construction. In health care, they brought us hospitals and doctors’ groups and we were doing more assisted living facilities and social services. Together it really changes our health care practice. 

Q: You seem to be very acquisitive this past year — so why now? 

A: In the middle of the pandemic we did our recapitalization and when these other firms started to hear about that — they are all firms that we have known for 20, 25, 30 years — they picked up the phone and started asking about it. When we started talking about the vision, it was, “Hey, you know, let’s have a conversation.” 

It started with our recap and then that just accelerated the conversation, and obviously once you do one deal people hear about it and the phone rings a little more, and then you do the second deal; it brings a little bit more. And we’ve been an alternative to the other firms that are out there. 

Q: Are you having more conversations? Is the phone still ringing? 

A: The phone is still ringing. Whether they’re kicking tires or whether they’re just interested in what we’re doing or whether they’re truly interested in partnering, who knows? 

Q: Do the companies you take in retain their identities? 

A: They’ve built these deep-seated specialties, they’re strong in organic growth, they’re well-known in their communities, so we believe that they bring brand equity. We’re more interested in creating the synergies around the customer experience and what we’re providing to the customer and less worried about things like names and integration and merging and all those things. Those will come with time, but for now we believe that there is great brand equity in them keeping their names. 

Q: Do you have an objective of where you want to be in terms of the size of a brokerage? 

A: Our goal is to be the best that we can be and to build this broker of the future and it’s less around a dollar amount. The growth will come. We originally had a five-year plan that was going to have us at $500 million by the year 2025. We’re going to be almost close to that number by the end of 2021. It’s pretty reasonable to say we could easily become a billion-dollar broker in three to five years at the rate we’re at, but, again, it’s less about size and more about quality. 

Q: The insurance market has changed a lot over the past couple of years. How do you see it evolving going into next year? 

A: The market is maturing in many ways — not that it wasn’t a mature market before — but I think insurance carriers are figuring out how to use data in a completely different way, which is obviously changing the pricing that we’re seeing in the marketplace. These external catastrophe events that we’re seeing — certainly the number and the size of them have significantly increased — change the profit and loss statements for carriers, which is having an impact on the market overall. 

We think that is an opportunity for brokers that are creating value-added services in response. Clients need us to help them manage this process and move through it. And I think brokers are getting more sophisticated, too. Their capital structures are more sophisticated. They’re thinking more in terms of how they use technology and data. Obviously, the acquisition or M&A marketplace is quite robust in our industry, and capital is pouring in because they see the consistency of the returns. All those things are creating a marketplace that is full of opportunities for people if they’re willing to lean into them as opposed to resisting them.