Western Financial CEO outlines acquisition strategy

Western Financial Group is considering expansion into urban centers and across product lines such as commercial, agricultural and employee benefits, says brokerage president and CEO Kenny Nicholls Canadian insurer.

“We have strong representation across all lines, it’s just a matter of whether we want to define more volume within them,” says Nicholls. “Given the increased M&A activity, we are also exploring other opportunities to achieve our growth ambitions.”

For example, Western is developing other distribution channels such as embedded and digital insurance, which allows the brokerage to cover many regions of Canada where it does not have a physical presence. Western is now in its fourth year of operation with its digital channel and has recorded three consecutive years of 100% growth, Nicholls reports.

“By the beginning of next year, we will have over $100 million in contributions solely through this channel,” he says. “And we don’t even see any signs of slowing down.

“Now I want you to imagine a new premium of $100 million over four years. This is the equivalent of buying 10 new small brokerages with much less capital.”

Nicholls made his comments in a wide-ranging interview on acquisition strategy, technology, talent and industry collaborations.

Western is licensed in all provinces, and the overall acquisition strategy is to “find opportunities where we don’t,” Nicholls says. Then it’s all about cultural fit and potential, which means the company itself or the community in which it is located (product line and/or geographic location).

“Our approach is to maintain the owners’ legacy and apply our own know-how, our systems and some of our products to increase market share,” says Nicholls. “Getting back to culture is extremely important.

“Because at the end of the day, when we buy brokerages, (they) come with people and that’s the biggest element of brokerage. That’s why we want to make sure that our values ​​and our commitment to customers and communities are similar.

“When we evaluate and if any of them are not present, we just go.”

Branch integration

Nicholls also discussed the integration of Western’s branches with Huestis Insurance and Associates Ltd. (HIAL) following its full takeover of the brokerage last year. Western completed the purchase of the remaining shares of HIAL, effective May 1, 2023. In February 2021, Western acquired a non-controlling interest in the Saint John, NB-based brokerage.

“This resulted in one of the largest acquisitions in our history – 25 locations, over 200 dedicated employees,” says Nicholls. “But in a part of the country we didn’t know much about – the coastal region.”

Nicholls says it finds higher integration success rates by involving employees in the planning process. Nicholls says after a year of ownership, Huestis remains a western subsidiary and the plan is for full integration by 2025 or early 2026. CU.

Why does integration take so long? Nicholls says it must ensure that new employees are not paid less than they were before the takeover (which rarely happens). It is also important to adapt the systems between the two brokerage houses.

“Fortunately, Huestis is subject to the same system as us – (used) Epic. It may not be the exact same version, but at least it makes it a little easier.”

Other considerations include data comparison and branding considerations.

Nicholls remains optimistic about the brokerage’s M&A plans and future success. “Western has now had two of its best years of organic growth in its history,” he says. “Our profitability has never been healthier.

“We are starting to see interest rates easing all the time. We often see that we have been swimming against the current.

Feature photo: iStock.com/skynesher