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2021 brokerage revenue: $2.82B
Percent increase: 42.7%
Acrisure LLC got off to a slow start in 2021 but quickly gained steam and finished with record growth.
The company’s top executive expects more growth this year, in part from its purchases of several managing general agencies, in addition to other acquisitions and organic growth.
“Our client base is mostly small- to middle-market business owners,” who were among the slowest to recover from the COVID-19 crisis, said Gregory L. Williams, the Grand Rapids, Michigan-based brokerage’s CEO.
Acrisure weathered a sluggish first two months of 2021 as its clients’ business began to pick up, Mr. Williams said. “But overall, 2021 was a really good year for us.
We grew from $2 billion to $3 billion in revenue. Between our real estate division and insurance group, we did 155 acquisitions, and we grew 7.2% organically.”
Brokerage revenue in 2021 grew by 42.7% to $2.82 billion, moving Acrisure up one spot to No. 8 in Business Insurance’s ranking of the world’s largest brokerages.
“It was a record year in terms of growth,” Mr. Williams said.
Credit analysts have taken note of Acrisure’s rapid growth.
“It’s concerning from a credit perspective when a company grows ultra-fast,” as Acrisure has in recent years through organic growth and a “huge number of acquisitions,” said Bruce Ballentine, vice president and senior credit officer at Moody’s Investors Service Inc. in New York. However, “they’ve done it well over these years,” he said.
“A lot of these deals are tuck-in oriented” and are a core competency of brokers such as Acrisure that are making large numbers of acquisitions, said Joe Marinucci, senior director at Standard & Poor’s Global Ratings in Princeton, N.J.
Acrisure is able to complete acquisitions quickly because it doesn’t take a heavy hand in the process, according to Mr. Ballentine.
The broker likes to “make an acquisition and let the acquired entity run autonomously,” he said, rather than putting “the buyer’s brand and multiple systems in place on Day One. … It helps them do the number of deals they do because there is less disruption. They do work to bring the acquired entities onto common systems over time.”
Mr. Williams said the company’s 2021 overall growth included diverse sources of business. It views itself as a fintech business with insurance at its core, he said, and “it will probably always be our core.” But the company also offers cyber services, asset wealth management, real estate services and other services, he said.
The company’s Auris technology platform allows it to oversee disparate segments, Mr. Williams said. “We have the ability to connect what one vertical represents in terms of opportunity for another,” he said, adding he expects that to fuel more growth.
The platform was built by the team that came to Acrisure through the purchase of the insurance practice of artificial intelligence company Tulco LLC in 2020, Mr. Williams said.
“That is a differentiator,” Mr. Marinucci said of the Acrisure technology platform. “In some ways it’s a selling point” for smaller companies that want to become part of an operation that offers access to sophisticated technology resources, he said.
There are some headwinds pushing against organic growth, Mr. Williams acknowledged, as a segment of its business related to real estate title transactions has been dulled by interest rate hikes. It’s likely that organic growth will amount to around 5% to 6% this year, he said.
Acrisure had closed or signed letters of intent on 89 acquisitions this year as of June 1. Three of those — managing general agencies Volante Global, SUNZ Insurance Co. and Appalachian Underwriters Inc. — are key acquisitions, according to Mr. Williams.
“Those are very strategic to us,” he said, because Acrisure’s aim is to underwrite through MGAs “not for the purposes of taking risk” but to understand how it can “place that premium more thoughtfully for the benefit of our clients. … We decided we could turbocharge that effort by acquiring some high-quality MGAs.”
Acrisure earlier this year raised $725 million in funding led by a wholly owned subsidiary of the Abu Dhabi Investment Authority. “That capital was raised and earmarked for additional M&A,” Mr. Williams said.
In late June, Acrisure announced the acquisition of Russell Scanlan Ltd., a commercial insurance brokerage and risk manager based in Nottingham, England, that was founded in 1881.
2021 brokerage revenue: $19.86B
Percent increase: 15%