Springfield Business Journal_2020-11-16

Insurance brokers mixed on M&A surge Richard Ollis is a fourth-generation owner of Ollis/Akers/Arney and he plans to remain independent. His great-grandfather, pictured on the far wall, founded the firm. MCKENZIE ROBINSON Ollis/Akers/Arney president joins state insurance board to help agencies remain independent SPRINGFIELD BUSINESS JOURNAL · 11 NOV. 16-22, 2020 INSURANCE & BENEFITS by Christine Temple · ctemple@sbj.net For Richard Ollis, running the insurance agency his great-grandfather founded 135 years ago in Springfield is a proud legacy. He said independence and local owner- ship are in the DNA at Ollis/Akers/Arney, the oldest insurance firm locally. “We’ve used remaining independent and employee ownership as our strategy,” Ollis said of the agency now servic- ing nearly 7,500 accounts. “I believe that someone that lives in the community, works in the community, and owns a share and a stake in the business is going to serve clients more ef- fectively than some big corpo- ration.” His emphasis on local own- ership stands in contrast to a rising trend in the insurance industry: mergers and acqui- sitions among commercial in- surance brokers. Ollis said he gets a couple phone calls a month soliciting just that. And last year was the most active year yet, with Optis Partners, an investment banking and financial consulting firm, tracking 649 deals. Reports show 2020 numbers are on trend for more of the same despite the COVID-19 pandemic. Optis’ analysis finds 58% of the 2019 deals were done by 10 companies, with Acrisure, Hub Interna- tional, AssuredPartners, Broadstreet Part- ners and Gallagher Insurance in the top spots. Bucking that trend and keeping inde- pendent agencies independent is what led Ollis to run for a seat on the Missouri Association of Insurance Agents Board of Directors. He joined the board as a representative for Greene, Christian, Dal- las, Hickory, Polk, Stone, Taney and Web- ster counties this fall. His term lasts three years. “One of my goals of serving on the MAIA board is to help others, if they chose to, find a path to remain independently owned rather than being gobbled up by one of these venture capital companies,” he said. Different models Lance Smith, president of PJC Insurance Agency, also has observed the trend, but he’s found advantages if an agency chooses the right part- ner. The 51-year-old PJC sold to Sunstar Insurance Group LLC in 2016, Smith said. He and PJC Chair Raylene Appleby retained equity in the business through the sale and remained in their management positions. “We did it largely for increasing our market presence, increasing the insur- ance carriers we can represent and having better, deeper rela- tionships with those carriers, and increas- ing service offerings for our clients,” he said. “You can do a lot more when you’re part of a larger orga- nization.” But he agrees with Ollis’ concern about mass buyouts by private equity or insur- ance aggregators. “A lot of these people that are buying agencies are just trying to acquire revenue, and they don’t care about the cultural fit,” Smith said. “When you look to purchase Lance Smith : Sale to Sunstar follows strategic plan. See M&A on page 17 649 M&A deals in insurance industry in 2019