Two ways COVID-19 affected this large brokerage’s M&A strategy

The COVID-19 pandemic required one large Canadian brokerage to take a “very different approach” to mergers and acquisitions (M&A) activity.

COVID affected the M&A process in two significant ways, Jamie Lyons, president and chief operating officer with Westland Insurance Group Ltd., told Canadian Underwriter recently. First, it forced the brokerage to focus internally and therefore paused a number of ongoing M&A conversations in the spring and summer. Second, once the brokerage re-engaged in these discussions, they mostly had to take place virtually.

Surrey, B.C.-based Westland Insurance has purchased about eight brokerages since the World Health Organization declared the novel coronavirus a pandemic Mar. 11. Most recently, Westland announced the closing of its second acquisition in Manitoba, effective Nov. 6, with its purchase of MIG Insurance Group. At the beginning of the month, Westland closed its first-ever acquisition of an Ontario brokerage after it bought Gillons Insurance Brokers Ltd.

Lyons said when the pandemic struck, Westland “needed to focus internally, shift our attention first and foremost to the safety of our staff, our customers, and our communities, and understand the impact of COVID on our business. Similarly, the brokerages we were speaking to also needed to focus internally. As we became more confident in our response to COVID and the resiliency of the industry, we re-engaged our M&A discussions in the late summer.”

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Most of these re-started conversations had to take place virtually. “When we look to acquire a brokerage, our leadership and executive teams typically seek to meet owners, management and staff in person, especially during onboarding,” Lyons said. “So COVID required us to take a very different approach here.

“It was remarkable how quickly we all adapted to these new circumstances.”

Westland said in a release announcing its acquisition of MIG Insurance that the smaller brokerage is an “innovative, digitally advanced brokerage.” Canadian Underwriter asked Lyons how important digital technology is to Westland’s M&A strategy.

“Acquiring a brokerage such as MIG – an innovative and digitally-savvy operation – is attractive for us, as we look to incorporate the learnings and experience of their team into our own technology transformation,” he said. “Digital technology is playing an increasing role in customer experience and employee experience, two areas where we are heavily focused as an organization.”

Headquartered in Portage La Prairie, Man., MIG Insurance was founded in 1995 and provides residential, auto, life, travel, recreation, farm and commercial insurance through its eight branches (and more than 50 employees) in Manitoba.

With its acquisition of Gillons, Westland acquired a long-standing business with a great culture, Lyons added. “We felt it was vital for us to enter Ontario with a highly reputable insurance operation with strong and stable leadership,” he said when asked why Westland decided to go with Gillons as its first Ontario acquisition. “The senior leadership team – Myron Romaniuk, Trevor Fitzgerald and Tracy McDonald – are all staying on to continue to lead the operations and to assist us in continued expansion.

“The Ontario marketplace is a significant milestone for Westland. Not only is it strategically important as a province for us, but it aligns with our goal to create an independent, family-owned, community-based, national insurance brokerage.”

As Westland looks to expand, are there any provinces or types of brokerages it is looking at, particularly in central or eastern Canada?

“We continue to expand our ability to serve the needs of Canadians in all provinces, but more recently a lot of our focus has been east of the Rockies,” Lyons said. “Our strategy is to become a truly national brokerage and for us that means being represented in communities coast-to-coast across Canada.”

From an M&A perspective, one major criterion is cultural fit, Lyons said.

“We feel we are unique as a buyer in that we are family-owned and have strong community roots, like many of the brokers in Canada,” Lyons said. “To the extent that these elements are important to brokerage owners and operators thinking about selling their business, which is a difficult and emotional decision, there is great alignment with Westland.”

Feature image via iStock.com/Ridofranz