September 03, 2009
Brown & Brown has grown into a major player in the insurance brokerage business through 300 small acquisitions. The key: Create a competitive and lucrative sales culture and cut all fat.
As growth strategies go, building by acquisition isn’t for everybody.
But everybody isn’t Brown & Brown, Inc., the Daytona Beach- and Tampa-based insurance brokerage firm that ranks seventh in revenues in the United States—and ninth in the world. For them, years of careful acquisitions—300 in the last 16 years—and one key 1993 merger with Poe Insurance of Tampa, has built a company of great financial strength and influence.
Brown & Brown (NYSE: BRO) carefully investigates each target acquisition, makes sure it will be a good fit with the company’s intensive sales culture, then assimilates it from the first day.
“They’re very picky,” says Sally Roberts, senior editor at Business Insurance magazine. “Powell and Hyatt Brown would tell you there have been mistakes along the way, but they know the type of people they’re looking for. The courtship is long and involved. Hyatt and his wife will host some of these firms; the principals stay at their house, they have meals together. They take a lot of time. They know the mold they want the company to fit.”
Brown & Brown, which has 5,400 employees, does so many acquisitions that it has in-house legal, financial and quality control staff dedicated to nothing else.
“Cultural fit is of paramount importance,” says Brown & Brown president and CEO J. Powell Brown. “That is the biggest thing we look for. Its not geography. Cultural fit is one of the first and most important things we look at. We’re interested in the quality of the people. So whether they’re in Detroit, Denver, or Sarasota, the bottom line is it’s all about good people. We intend for those sellers to be with us in the future and stay with us. That might lead to additional acquisitions in that area or in whatever their specialty might be.”
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Copyright 2009 by Bob Andelman