BrokerLink reveals 18-month growth target

BrokerLink aspires to increase its direct premiums written (DPW) by more than $1 billion over the next year-and-a-half.

In 2023, BrokerLink surpassed $3.5 billion in DPW.

“Our ambition is to be $5 billion by the end of 2025,” president Joe D’Annunzio tells Canadian Underwriter. “We’re on track to reach our objective and will continue working hard to get there.”

D’Annunzio was discussing BrokerLink’s latest deals, what the future holds for the brokerage, and how the current interest rate environment affects mergers and acquisitions.

BrokerLink has already closed four deals this year, following on the heels of 20 total acquisitions in 2023.

In March, BrokerLink acquired Owen Sound, Ont.-based Hanbidge & Bowman Ltd. Insurance Professionals.

Last week, the brokerage announced the acquisition of two other Ontario brokerages – M. Edward Powell Insurance Brokers Ltd. in Oakville and Russ Bastow Insurance Broker Ltd. in Ajax. It also acquired the personal and small-to-medium enterprise commercial insurance book of business from Ottawa-based Halpenny Insurance Brokers Ltd.

D’Annunzio says the Halpenny deal was not typical in that BrokerLink usually buys a brokerage outright, but he knew the broker principal and the deal fit BrokerLink’s footprint.

“They decided their strategy was to concentrate on mid-market commercial lines as a brokerage rather than small business and personal lines, and we had a relationship with them, so we bought their personal lines and small business book,” D’Annunzio says. “They continue to operate under Halpenny on the commercial side in the mid-market.”

All three recent deals involved good quality brokerages in their communities, D’Annunzio says. “So, those are real nice fits for us, and we’ll continue to expand,” he says. “We have a robust pipeline and are quite excited about what’s to come in 2024.”

D’Annunzio also discussed how the current interest rate environment affects M&A.

He says while he can’t speak for his private equity-backed counterparts, for BrokerLink, owned by Intact Financial Corporation, it’s a stay-the-course approach.

“Because we’re in a good financial position and we do have excess capital to deploy, our growth strategy works on a bunch of multiple fronts,” he says. “Even when [interest rates] went high over the last two years, versus where they’re going now…for us, we’re going to say active.

“We’ll still remain disciplined like we always have, whether it’s low interest rates or high interest rates. It hasn’t hurt us.”

Similarly, interest rates have not changed BrokerLink’s approach to negotiating financial terms and conditions on a deal.

“We’re flexible when we’re acquiring a broker,” he says. “When we’re dealing with that broker, what his terms are, and what he wants from the acquisition, we’re always flexible from that perspective. When it comes to deploying capital, it’s business as usual.”

Sticking to the model has been successful, leading to profitable growth, D’Annunzio says.

“We get into sometimes two-, three-year conversations and we massage that relationship. It’s making sure the return is there, and making sure that the employees, the talent, you bring on, you keep them.

“We’ve had a recipe that has worked for us for many years, and it’s given us success,” D’Annunzio says. “The interest rate or the market environment doesn’t change that, as long as we stay focused…”

 

Feature image by iStock.com/oatawa