VENBROOK SERVES A NICHE BY JULIANN WALSH
Brokerage Finds Growth in the Middle Markets
Jason turner started working in insurance right out of college when, at 23, he took a job at a Farmers Insurance agency run by
an acquaintance. As he learned the
industry, he saw an untapped market
— right in the middle.
Turner convinced his dad, who
ran a small surety bond business,
to partner with him and open a
brokerage in Los Angeles focused on
serving middle market businesses that
were “buying insurance off the shelf.”
“Those were interesting days
because really neither one of us knew
exactly what we were doing,” Turner
said. “Failure was not an option, so it
was keep going … keep going.”
Several years and a few acquisitions
later, Turner formed Venbrook Group,
LLC. Today it is one of the largest
independent P&C brokerages in the
U.S., with more than 150 employees
working on 10,000-plus accounts.
Turner remains at the helm as
Venbrook’s CEO. With seven offices
around the country, Venbrook offers
advice, risk management, risk transfer,
risk control, and risk mitigation
solutions to companies with revenue
between $10 million and $1 billion.
“Our sweet spot is $10 million to
$100 million in revenue,” Turner said.
Venbrook offers middle market
buyers the same level of insurance and
risk management services along with all
the resources a publicly-traded Fortune
5000 client might get from a leading
brokerage house, Turner said.
The company services a select
group of industries, mainly real estate,
transportation, financial services,
construction and development.
Recently, Venbrook added a food
manufacturer with an 18-month old
claim denial. Venbrook gathered the
account’s lead managing director on
the P&C side, a loss control person,
the claims manager and then brought
in an attorney to review the claim.
“Our team came together and said
this loss should have been paid, we
think it’s worth challenging,” Turner
said. They prepared a strong response
to the carrier who then agreed to pay
the $1 million claim.
Turner believes Venbrook’s role is
to act as a consultant, helping clients’
businesses prosper, helping navigate
through contracts or releases, and
even assisting with human resource
issues or ERM issues.
“We don’t look at insurance as a
transaction,” Turner said. “We look at
it as a strategy that every client needs
to incorporate into their business.”
In October, Venbrook raised
$42 million from Madison Capital
Funding, a subsidiary of New York
Life. A portion of that funding was
then used to acquire a New Jersey-based wholesaler, Brooks Insurance
“I’m proud of our company and
the people we have working with us,”
Turner said. “I’m proud we are still an
independently owned organization,
that somewhat separates us from a lot
of others.” &
BROKERS ACTIVE WITH ACQUISITIONS
BY ANNE FREEDMAN
The number of broker M&As — many by private equity —
“exploded” during the first quarter of 2017.
Mergers and acquisitions continue to be robust due to an appetite for growth in the brokerage sector.
There were 358 transactions in
2016, exceeding the prior five-year
average of 348 transactions per year
during 2011-2015, according to the
2017 “Global Insurance Distribution
and Services Sector Mergers &
Acquisitions” report by Conning, an
investment management company for
the global insurance industry.
“There are a number of trends
driving this,” said Alan Dobbins,
director of insurance research,
Conning. “There has been slow
organic growth. There are less
exposures, and flat to negative pricing
in most commercial lines. It’s tough
to grow profitably in that kind of
Acquisitions offer “one of the best
growth options” right now, he said.
Another big driver is demographics,
he said. The average age of brokerage
executives is 59, and nearly half of
them don’t have succession plans in
place, Dobbins said.
One-third of all transactions
during the past five years were by
a mix of public and private equity-owned brokers, according to Conning.
“Private equity firms like the
insurance distribution sector because
the cash flow is reasonably predictable
and it doesn’t require much in the way
of capital expenditures,” said Timothy
Cunningham, managing director
of OPTIS Partners, an investment
banking and financial consulting firm
specializing in the insurance industry.
“Buyers are still being aggressive
in their valuations of prospective
acquisition partners,” he said.
Marsh Berry & Co., announced
its formation in January, instantly
becoming the 14th largest privately
held insurance firm and the 7th largest
privately held employee benefits firm
in the U.S., according to the firm.
“That was an eye-opener,” said
Dobbins. “I don’t recall ever seeing
that number of independent groups
form a large organization that quickly
with that number of transactions.
It’s hard to say if that’s going to be a
“If you look at the industry, you
are going to see a fairly significant
reduction in the number of agents and
brokers, maybe 15 to 20 percent, in
the 10 to 15 years,” Cunningham said.
“They are not going to go away. They
will be absorbed into other firms.”
“They will have more scale, more
skill, more talent,” he said. “I think it
will be positive for clients. They will
have more opportunities and more
robust brokers with whom they can do
OPTIS Partners recently reported
that agency M&As “exploded during
the first quarter” of 2017. There were
178 transactions, compared to 115 in
the first quarter of 2016.
The bulk of the transactions were
private-equity-backed brokers (93 in
2017, compared to 56 last year).
The PE-backed buyers involved in
the most transactions were Acrisure
and Alera Group, a new organization
that came into being with the
consolidation of 24 brokerages focused
on employee benefits, P&C, risk
management and wealth management.
Alera Group, which was formed
with investment from Genstar Capital
LLC and brokerage assistance from
Jason Turner, CEO,
Venbrook Group LLC
Alan Dobbins, director of insurance research,
Conning and Timothy Cunningham, managing
director, OPTIS Partners