Is there a component missing from insurance M&A deals? | Insurance business America
It’s one thing to make deals – it’s another to make them work
Insurance News
By Emily Douglas
Mergers and acquisitions (M&A) are a crucial part of growth and expansion, allowing companies to quickly scale, diversify offerings and even enter new markets. However, according to data from McKinsey, global M&A activity fell 16% in 2023 to a total value of $3.1 billion. And while the market remains resilient post-pandemic, could there be an important missing component that is being overlooked when it comes to securing deals?
“We absolutely look at cultural fit first,” said Barbara Ingraham (pictured), director of integration at One80 Intermediaries. “We are really interested in whether a company has a culture of innovation, cares about its employees and embodies entrepreneurial spirit.”
Acquisition experience
One80 recently put this into practice when it acquired C&M First Services, a full-service brokerage firm, with Ingraham noting that their strength lies in the strong niche they have created in the market.
“They understand the Asian American distribution channel,” she told IB. “They have a great sense of innovation, a tremendous entrepreneurial spirit and have approached this market very aggressively. Plus, they’ve continued to grow since we bought them.”
Critical components of an acquisition
According to Ingraham, the integration of various products and services post-acquisition is another important part of One80’s strategy.
“We carefully consider whether a product offering enhances or potentially conflicts with our existing services,” she said. “Do they have a significantly different distribution channel? Do they address different elements in the retail market? In which case would it be an improvement even if it might look like the same product? Do they potentially involve carrier relationships? Do they have very strong sponsorship relationships that would strengthen us as a company? All of this will be assessed during the acquisition process.”
This thorough evaluation ensures that new products complement One80’s portfolio and strengthen their overall market presence through solid carrier relationships. Ingraham added: “Strong carrier relationships play a critical role as they can significantly improve our market position and provide additional growth opportunities.”
The diversity within One80’s business model cannot be overstated – something that is indicative of the broader market in general.
“Our business model is really based on diversity,” Ingraham said. “We take a portfolio approach to our business, which gives us a huge advantage. For example, during the coronavirus crisis, our travel business was impacted, but our warranty business thrived due to increased demand for tablets in schools. Through this diversity, we hope to withstand all market changes. Another advantage is that we have first-hand knowledge of many different market segments. So when an opportunity presents itself, we have already explored this segment – we know it – we know how it will develop.”
Expand around the world
Geographic expansion is also a focus for One80, with potential growth on the West Coast, Canada and Europe.
Ingraham emphasized the importance of maintaining the entrepreneurial spirit and nurturing new leaders through initiatives such as Innovation Challenges.
“We challenge our next generation of leaders to develop new products or services to drive awareness and understanding across our organization,” she said. These challenges not only promote creativity, but also help identify and develop future leaders in the company. Digital transformation is another important focus of One80.
“We are expanding our digital listings shopping capability with the goal of improving the retail broker experience and getting products to market faster,” said Ingraham. This commitment to digital advancement underscores One80’s strategic vision for the future and ensures the company remains at the forefront of industry innovation. And by leveraging digital technologies, One80 can streamline operations, improve customer experiences and introduce new products more efficiently.
“By maintaining our entrepreneurial spirit and fostering innovation, we ensure that each acquisition expands our capabilities and strengthens our market position,” Ingraham added.
Ingraham returned to the idea of fostering a culture of innovation within the company, adding that they are investing in leadership development training – something that could be used to address the challenges of the current tight labor market.
“We host innovation challenges for our next generation of leaders,” she explained. “It’s exciting to see our teams develop innovative solutions that can take our business to the next level.”
Overall, it is One80 Intermediaries’ strategic approach to mergers and acquisitions, combined with its emphasis on cultural fit, niche expertise and digital transformation, that positions the company for continued success in a competitive market.
As Ingraham put it, “Our focus on cultural fit, niche expertise and digital transformation allows us to stay ahead and continue to grow in an ever-evolving market.”
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2024-06-26 15:36:33
www.insurancebusinessmag.com
