Brokerage M&A activity surges amid pandemic

Brokerage consolidation has exploded, with at least six acquisitions announced across Canada in the past week.

Most recently, large brokerage Westland Insurance Group  announced Wednesday the closing of four deals, adding new retail offices in British Columbia, Alberta and Manitoba.

“These acquisitions strengthen our presence in western Canada and for the first time provide us the opportunity to support clients in Manitoba,” said Jason Wubs, CEO of Westland Insurance. “These are all client-focused agencies with deep roots in their communities, and they are perfectly aligned to Westland’s core values.”

Westland’s acquisitions include the following:

• King Insurance, a family-owned brokerage founded in 1962 and located in Winnipeg. Its professional insurance advisors are experts in residential, auto, business, life and disability insurance
• Johnson Agencies, which has served the insurance needs of Leduc, Alta., and surrounding areas since 1967. The brokerage provides residential, auto, recreation, commercial, farm, travel and life insurance
• Hedderick Insurance Agencies, located in Pincher Creek, Alta. Hedderick has been serving clients since 1949, providing residential, commercial, recreation, farm and auto insurance
• Family-owned Nauroth & Associates, which has been in operation for over 25 years. Their expert advisors provide auto, residential, commercial, travel and life insurance

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With these acquisitions, Westland Insurance will be adding four branches and over 30 employees across Canada. Post-acquisition, Westland will have nearly 1,500 employees and more than 120 offices in B.C., Alberta, Saskatchewan and Manitoba.

“This is an exciting time for Westland as we continue our strategic expansion across Canada,” Wubs said.

Another western Canada-based brokerage announced a deal Sept. 1. Calgary-based Rogers Insurance Ltd. said it had acquired a “significant minority interest” in McLean & Shaw Insurance Inc. As part of the transaction, the name of McLean & Shaw will change to “Rogers McLean Shaw Insurance Ltd,” Rogers Insurance said in a release.

Since 1956, McLean & Shaw has developed “tremendous expertise” in the transportation, oil and gas servicing, manufacturing, and farm sectors and has “grown a very loyal base of customers,” Rogers Insurance reported.

Doug Laird and Ryan Lyster, president and managing partner (respectively) of Edmonton-based McLean & Shaw, will become shareholders in employee-owned Rogers Insurance.

“Our partnership with Rogers Insurance provides additional access to markets, which means more choice for our clients, and allows us to focus on our areas of expertise so we can aggressively expand our clientele in Edmonton,” Laird said. “McLean & Shaw’s core values of authenticity, passion and accountability are aligned with our new partners and we are pleased to be joining an organization with one of the best work environments in Alberta.”

Bruce Rabik, chief operating officer of Rogers Insurance, pointed to the excellent fit between the two brokerages. “We look forward to offering our comprehensive back-office support to the McLean & Shaw team and working together to grow our presence in Edmonton.”

The Rogers group of companies has more than 600 staff members and operates in Victoria, B.C., across Alberta and in Brampton, Ont. The group also includes Megson FitzPatrick Insurance Services, Sylvan Agencies, A-WIN Insurance, CCV Insurance & Financial, RV Direct and EasyCover.

Rogers Insurance is a founding member of the Canadian Broker Network (CBN), which writes over $1.5 billion in premiums. McLean & Shaw Insurance becomes a member of CBN through the transaction.

Related: Behind the scenes of Hub’s latest acquisition

Like the McLean & Shaw deal, Hub International pointed to the calibre of staff in its most recent Canadian brokerage acquisition announced Wednesday. Hub acquired Grande Prairie, Alta.-based Elevate Insurance Brokers, a locally-owned, independent full-service brokerage providing home, auto, recreational vehicle and business insurance.

“Hub seeks to partner with brokers who have like-minded teams that care about their clients’ success and are focused on continued growth,” Doug Lyall, chief sales officer and vice president of Hub’s Prairie Arctic region, told Canadian Underwriter Wednesday. “They have built their brand focused on providing industry-leading service through education, local knowledge, and a focus on their community.

“This, combined with their growing team of insurance professionals, made them a key addition to our present Grande Prairie location,” said Lyall, adding that he believes the move will position Hub as the area’s leading insurance brokerage. “Hub feels that adding their suite of products and insurers to Elevate’s present carriers will allow them to further execute on their already strong local brand.”

These deals follow a number of other notable mergers and acquisitions during the pandemic, including nine deals closed by BrokerLink in August and the shareholder approval of the Aon-Willis mega merger, which may close in the first half of 2021 if regulatory approval is granted.

There is discussion within the industry about the impact of COVID-19 on brokerage M&A activity.

One BrokerLink executive told Canadian Underwriter last month that COVID could actually accelerate brokerage M&A, as brokerage leaders use the pandemic as a time to reflect on their futures.

Mike Berris, a brokerage M&A expert with Smythe Advisory, wrote in a blog Wednesday that reaction to the pandemic has been interesting. “While some potential purchasers understandably paused, others actively pursued acquisitions, albeit cautiously at first,” he wrote. (Berris’s take on M&A during COVID is explained in this online article).

Feature image via iStock.com/mikdam