Top Insurance Brokers, #5: Hub International Ltd.

Brokerage revenues in 2023: $4.26 billion
Percentage increase: 13.5%

Another year of strong acquisitions and solid organic growth helped Hub International Ltd. surpass the $4 billion mark in 2023.

The brokerage house was the largest acquirer of smaller brokerage houses last year and maintained its growth pace in 2024.

“Our goal is to acquire strong operators with a sales-focused culture, and we benefit from adding them to the Hub organization, and just as importantly, they benefit from our investment in resources and services that help them grow even more once they join the Hub,” said CEO Marc Cohen.

Hub recorded $4.26 billion in brokerage revenue in 2023, maintaining 5th position in the market Business Insuranceplace in the ranking of the largest brokerage houses in the world.

Hub made 65 acquisitions in 2023, up from 68 in 2022, according to Chicago-based Optis Partners LLC. It was again among the top acquirers in the first half of this year with 20 deals announced.

Timothy J. Cunningham, managing partner at Optis, said that over the past 15 years the brokerage has transformed into a very stable and diversified firm.

“It’s a more strategic acquirer today than it was 10 years ago,” he said, noting that Hub has broadened its acquisitions to include wealth management brokers.

Among the notable acquisitions last year, Mr. Cohen said, were Cincinnati-based Horan Associates Inc. and Horan Smart Business LLC, and Columbus, Ohio-based Overmyer Hall Associates.

“These were very strategic acquisitions that allowed us to enter a region where we didn’t have a platform and create a new platform that became our 35th regional hub,” Mr. Cohen said.

He added that the purchase of Dwight Andrus Insurance Inc., based in Lafayette, Louisiana, is also worth noting.

Higher interest rates, which have forced some highly leveraged brokers to curtail their merger and acquisition activity, and ongoing consolidation in the brokerage market are not having a negative impact on Hub, Mr. Cunningham said.

“The hub is able to fund its transactions from its current cash flow and does not need to be a borrower to execute its underlying transactions,” he said.

Hub has benefited from reduced competition to acquire other brokers, but the reduced competition has not translated into lower valuations for potential acquisition targets, Mr. Cohen said.

“The fact that there are fewer buyers is good for us because it gives us more time to talk to the seller, which allows us to tell our story and ultimately win more deals,” he said.

Mr. Cohen said he expects Hub to continue its acquisition trend through the end of this year and make a similar number of purchases to 2023. While it has historically focused on acquisitions in the United States and Canada, buying brokerages overseas is not out of the question, Mr. Cohen said.

“The door is open. If the right opportunity came along, we could see ourselves going down that path,” he said.

Regardless of the market, Hub focuses on what it can control: new business, retention and quality, as well as attractive M&A deals, Cohen said.

“Managing these measurable levers delivers consistent results and allows us to deliver results despite rate cycles,” he said.

In addition to growth through acquisitions, Hub is focusing on organic growth through new business expansion and retaining existing clients, Mr. Cohen said. The brokerage achieved 8% organic growth last year, he said.

The tough market has caused customers to take on more risk, Mr. Cohen said, by accepting higher deductibles, increasing retentions by insurers, seeking self-insured policies and lowering limits.

“As insurance brokers, it is our responsibility to educate clients on market dynamics, provide ways to reduce or eliminate risk and offer insurance solutions,” he said.

Evelyn Ocas Salazar, vice president at Moody’s Ratings in New York, said Hub’s 2023 results were in line with expectations and the rating agency has a positive outlook for the broker.

She added that Hub has achieved success by leveraging its ability to leverage expertise from different business segments, which allows it to grow its customer base.

In January, the company launched its North American real estate division, led by Blake Giannisis, who joined last year from Aon PLC.