Brokerage revenue 2021: $2.61 billion
Percentage increase: 46.8%
Solid organic growth, fueled by commercial rates and dynamic employee recruitment, and the acquisition of a major personal lines insurance agency have enabled Alliant Insurance Services Inc. to break into the market Business Insurance ranking of the world’s 10 largest brokerages for the first time this year.
The Irvine, Calif.-based brokerage firm, which began as a San Diego front office in 1925, reported 19.3% organic revenue growth in 2021.
Its purchase of Huntington Beach, Calif.-based personal lines agency Confie Holding II Co. last year gave Alliant a huge boost in personal lines revenue and more than doubled its workforce.
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’re seeing higher organic growth for all brokers than it has traditionally been.” The rate of increase, however, is moderating, he said.
Alliant reported revenue of $2.61 billion in 2021, up 46.8%.
Policyholders have adapted to market conditions.
“Businessmen are taking a closer look at their spending and how to control it. To some extent you see higher deductibles or maybe lower limits to control insurance expenses,” Zimmer said.
Alliant’s construction and real estate verticals, focus areas staffed with industry specialists, grew the most in 2021, with the construction sector now the company’s largest, did he declare.
The broker’s reach in the construction sector is national, having brokered coverage for improvements at New York’s LaGuardia Airport and projects in the Hudson Yards development in Manhattan, Mr. Zimmer said.
Alliant retail business revenue increased 39.8% to $1.44 billion, employee benefits revenue increased 22.5% to $569 million, wholesale business increased by 18.1% to $244.38 million and personal lines climbed 487.74% to $309.15 million.
Alliant ended 2021 with 9,194 employees, compared to 4,457 at the end of 2020.
Zimmer said the surge in personal lines revenue was tied to the purchase of Confie, which specializes in non-standard auto coverage. Additionally, the 2020 acquisition of Senior Market Sales Inc. expanded Alliant’s Medicare business, which continued to grow in 2021, he said.
In early 2021, Alliant purchased Greenwich, Connecticut-based BridgePoint Risk Management LLC, which specializes in covering business owners, high-level executives, athletes, artists and art collectors. art, jewelry, wine and automobiles.
Much of Alliant’s recent technology spending has been on internal efficiency, Zimmer said. The company has also invested in some customer contact and prospecting technologies.
John Wepler, president and CEO of Marsh, Berry & Co. Inc., a Woodmere, Ohio-based mergers and acquisitions advisory firm, noted that Alliant is backed by private equity, as opposed to to owned, which means that a majority of the company is owned by employees. “You have a lot of people whose interests are aligned with organic growth,” he said.
GTCR LLC was Alliant’s first private equity investor in 2000. Alliant currently has about a dozen institutional investors, with Stone Point Capital being the lead institutional investor, but the company is still over 50% owned by its management and its employees.
The brokerage is “truly an organic growth company,” Wepler said, emphasizing hiring and developing producers.
Alliant has been “focused on its producer strategy,” and producers continue to be strong in building business volumes, said Francesca Mannarino, New York-based associate director at S&P Global Ratings. She added that after recent larger acquisitions, the focus in 2022 is more likely to be on smaller “tuck-in” deals.
Ms Mannarino said Alliant’s ‘hiring sideways strategy’, in which it seeks to acquire highly experienced producers with large volumes of business, could account for up to 30% of the broker’s organic growth in some segments.
Alliant, like several other brokers who pursue a similar strategy, has been the subject of poaching lawsuits by rivals from whom it has hired staff.
Julie Herman, New York director of S&P Global Ratings, said that when Alliant seeks to win such cases, it tries to reach a commercial resolution with previous employers.
“We are still working with their former employer to make a smooth transition,” Zimmer said. “People should be able to work where they want to work and customers should be able to choose who they work with. After that, everything should be settled commercially.