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Build a billion dollar revenue brokerage business

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For Mina, the event of the day was a chat with himself and Risk Strategy founder and chairman Mike Christian, who handed over the reins of CEO to Mina in 2019.

read more: Risk Strategy Appoints New Chief Executive Officer

Risk Strategies started in 1997 as “a small alternative to the upper middle market of large account brokers”.

According to Mina, the company started an equity fund in 2010. The first injection was he through a minority investment by WR Berkley Capital. According to Mina, it has made small acquisitions and started branching out into specialized areas.

Kohlberg & Co. purchased a significant stake in this business in 2013 and was acquired by Kelso & Co. two years later, accelerating the company’s growth.

“Over the past 12 years, it has been tremendous to have had so many financial sponsors who have fueled our growth and have shared and committed to our philosophy of growing our business with a focus on our specialties. Lucky for you,” said Mina.

Today, the business consists of over 60 offices, owns several specialty brands in addition to retail outlets, and is home to One80, a wholesale and alternative distribution business.

This year, Risk Strategies celebrates more than just a quarter century. The North American brokerage surpassed his $1 billion in earnings. This is a “highlight” for Mina.

“We don’t plan to stop anytime, but it was a great, big number, and now we’re looking to the next big number,” Mina said.

According to Mina, growth is due to an “80/20 mix” (i.e. 80% acquisitions, 20% organic).

“I don’t think we’ll be among the top 10 acquirers, but we definitely buy businesses that fit our strategic profile and long-term growth model,” said Mina. “We like companies that specialize in a specific niche and have carved out a specific value proposition that we believe can be expanded by offering a national distribution platform.

“yes [it’s] Honestly, a combination of acquisitions in a rapidly consolidating market, [crossed with] Organic growth is doing very well. “

Mina expected this mix to continue for the next few years, but he admits there are “discussions” about how long brokered M&A will last.

“Every time we look at the number of acquisitions, we hit a new high water mark. This is an all-time high and we think it will continue next year,” Mina said. “I don’t know if it slows down significantly.”

According to the CEO, rising interest rates may “moderate enthusiasm a bit”, but “baby boomers” are still looking to secure the future of their businesses.

Despite global economic pressure, Mina was confident that the M&A pipeline this year remained “strong.”

read more: ‘Now is the time to sell’ – Pat Gallagher on brokerage M&A

“I think this year will be a similar performance to last year. In terms of round numbers, it’s similar in terms of volume and total revenue,” Mina said. We don’t see it as an acquisition, some of our competitors do.”

On organic growth beyond 2022, Mina said, “You can’t discount the impact of interest rates.”

The business is poised for cyber growth, with rate increases “well documented”. rice field.

Travel and recreation – the ‘big space’ for risk strategy – are two areas that have recovered after pandemic restrictions.

“We are seeing great returns [the entertainment] space,” said Mina. “Travel is another area that has delivered very good returns on ‘previous and subsequent’ performance.”

On the wholesale side, Mina described the business’ program as “a real boon.”

On the biggest challenges facing insurance agents today, Mina said technology, risk evolution and talent are all key issues.

“As an industry, we have some challenges. [in terms of uniformity and compared to industries like banking]we’re going to need to invest in technology to get to a better place,” Mina said.

Broker bosses called for a collaborative approach to tackling evolving risks.

“When you think about some of the risks out there, like wildfires on the West Coast or hurricanes and floods in Florida, all those risks require new solutions to keep building going. And we will invest and grow our business and our personal wealth in those spaces,” Mina said.

“As an industry, we definitely need some new solutions that we need to lean forward and be a little more innovative and creative.”

Regarding talent and succession planning, Mina said the industry must ensure that it “invests in the next generation of insurance professionals.”

“It will need to be a diverse portfolio of insurance professionals,” Mina said.