Top insurance brokers, No. 10: Alliant Insurance Services Inc.Posted On: Jul. 12, 2022 12:00 AM CST
2021 brokerage revenue: $2.61B
Percent increase: 46.8%
Robust organic growth, fueled by buoyant commercial lines pricing and employee recruitment, and the acquisition of a large personal lines agency enabled Alliant Insurance Services Inc. to break into the Business Insurance ranking of the world’s 10 largest brokerages for the first time this year.
The Irvine, California-based brokerage, which began as a storefront agency in San Diego in 1925, reported 19.3% organic revenue growth in 2021.
Its purchase of Huntington Beach, California-based personal lines agency Confie Holding II Co. last year gave Alliant a huge bump in personal lines revenue and more than doubled its headcount.
The firm commercial insurance pricing environment is creating a tailwind for most brokers, said Greg Zimmer, president of Alliant. “That’s one of the reasons you see organic growth for all brokers higher than it has traditionally been.” The rate of increases, though, is moderating, he said.
Alliant reported $2.61 billion in revenue in 2021, up 46.8%.
Policyholders have made adjustments to the market conditions.
“Businesspeople are taking a much harder look at their expenses and how to control them. To a degree, you’re seeing higher deductibles or perhaps lower limits to control the insurance spend,” Mr. Zimmer said.
Alliant’s construction and real estate verticals, areas of focus staffed by industry specialists, grew the most in 2021, with the construction vertical now the company’s largest, he said.
The broker’s reach in the construction sector is national, having brokered coverage for improvements at New York’s LaGuardia Airport and projects in Manhattan’s Hudson Yards development, Mr. Zimmer said.
Commercial retail revenue at Alliant rose 39.8% to $1.44 billion, employee benefits revenue grew 22.5% to $569 million, wholesale rose 18.1% to $244.38 million and personal lines soared 487.74% to $309.15 million.
Alliant finished 2021 with 9,194 employees, compared with 4,457 at the end of 2020.
Mr. Zimmer said the large increase in personal lines revenue was tied to the purchase of Confie, which specializes in nonstandard auto coverage. In addition, the 2020 acquisition of Senior Market Sales Inc. expanded Alliant’s Medicare business, which continued to grow in 2021, he said.
Early in 2021, Alliant bought Greenwich, Connecticut-based BridgePoint Risk Management LLC, which specializes in placing coverage for business owners, high-profile executives, athletes, entertainers, and collectors of fine art, jewelry, wine and automobiles.
Much of Alliant’s recent technology spending has been on internal efficiencies, Mr. Zimmer said. The company has also invested in some client-facing and prospecting technology.
John Wepler, chairman and CEO of Woodmere, Ohio-based mergers and acquisitions consultancy Marsh, Berry & Co. Inc., noted that Alliant is private equity backed, as opposed to owned, meaning a majority of the company is held by employees. “You have a lot of people whose interests are in alignment driving organic growth,” he said.
GTCR LLC was the first private equity investor in Alliant, back in 2000. Alliant currently has about a dozen institutional investors, with Stone Point Capital the lead institutional investor, but the company is still more than 50% owned by its management and employees.
The broker is “really an organic growth business,” Mr. Wepler said, with an emphasis on producer hiring and development.
Alliant has “focused on its producer strategy,” and producers continue to be strong at building out books of business, said Francesca Mannarino, a New York-based associate director at S&P Global Ratings. She added that after the recent larger acquisitions, the focus in 2022 is more likely to be on smaller “tuck-in” deals.
Ms. Mannarino said Alliant’s “lateral hiring strategy,” in which it seeks to acquire highly experienced producers with sizeable books of business, could account for as much as 30% of the broker’s organic growth in certain segments.
Alliant like several other brokers that pursue a similar strategy, has been subject to poaching lawsuits by rivals from which it has hired staff.
Julie Herman, director in New York with S&P Global Ratings, said that when Alliant does seek to gain such business, it tries to come to a commercial resolution with the prior employers.
“We always work with their prior employer to make a smooth transition,” Mr. Zimmer said. “People should be able to work where they want to work and clients should be able to choose who they work with. Everything after that should be worked out in a commercial way.”