A fast-growing broker built on entrepreneurship

According to the Sica | Fletcher 2021 Year End Agency & Broker Buyer Index, PCF Insurance Services came in second only after Acrisure when it came to the number of acquisitions for 2021. But this year, PCF might be on its way to the top, with the brokerage announcing that as of this month, it has completed or has under the letter of intent 112 acquisitions for the year, so far.

Read more: How PCF Insurance is focusing on intentional, strategic growth with agency partners

Insurance Business America spoke with Jeremiah Jewkes, chief development and strategy officer to learn more details about the brokerage’s growth strategy, and what exactly PCF is looking for when it comes to acquisitions. PCF is also a specialist in the contractor and construction industry, and we asked Jewkes his thoughts on the current state of those markets.

Can you tell me about PCF Insurance Services, and how it differentiates itself in the insurance market? 

PCF is purpose-built as the ideal long-term home for entrepreneurial independent agency owners and agencies. We have designed a model that sits at the optimal intersection of entrepreneurship and teamwork to both empower and support our partners.

PCF preserves and enhances the elements that infuse the entrepreneurial spirit into independent agency ownership – local community brand and reputation, culture, employees, leadership, etc. – while creating a system backed by industry expertise, a people-first philosophy, technology and incentives that drive collaboration and significant benefits for all.

Everything we do at PCF is designed to maximize these attributes of entrepreneurship and teamwork, including our capital structure and governance practices. With our partners owning over 75% of the business, we are the only national insurance and risk management platform that is truly agency partner-owned, partner-led, and partner-centric.

PCF has recently made a string of acquisitions. What is PCF looking for in an agency when it comes to dealmaking? 

Perhaps unsurprisingly, all our efforts in M&A boil down to identifying the very same characteristics that distinguish PCF – entrepreneurship and teamwork. Entrepreneurship shows itself in a company’s visionary leadership, strategic risk-taking, strong financial growth, and persistent hustle to rise above the competition.

You can identify team-focused agencies through their success in building a resilient culture, motivated employee base, and platform where everyone gets the support they need to thrive. These are the attributes that cut across every PCF agency partner and define our family of businesses.  

We are zealously protective of our business model and culture, and while we may announce acquisitions in a variety of categories – including traditional retail brokerage, MGAs/MGUs, captives, F&I, or even other expansion areas over time – every partnership will always demonstrate PCF’s values in spades.

How do your recent acquisitions better serve the industry? 

We feel a strong sense of stewardship from the trust placed in us when agency owners join the PCF family, and we have internally invested significant time and resources to ensure we can honor that trust. When it comes to acquisitions, PCF has a simple mandate: Every partner who joins us will be better off because of their decision to align with our company.

Most importantly for employees, that means better health and retirement benefits, expanded professional opportunities, world-class training, equity upside, and a chance to be a part of building something special.

For clients, that means far more value-add resources for risk mitigation, a wider variety of product optionality, better trained and educated agents, and a large menu of choices through which their trusted advisor can serve them.

For Agency Partners, they get to retain the best facets of independent agency ownership and economic upside while simultaneously enjoying the benefits of scaling with a world-class organization purpose-built to serve them. All of this translates to an enhanced value proposition for stakeholders and superior growth and business outcomes for all.

Finally, we are convinced that while the industry is advancing and adopting improved practices, the role of the trusted business advisor is still central for helping agencies manage risk, particularly on the commercial client side. Rather than race towards a scale-at-all-costs mindset, PCF’s unique partner-centric model reinforces the importance of the advisor relationship while complementing it with modern technology and resources to best serve clients and their risk management needs.

We believe that a technology-enabled model, with the advisor and client at the center, is the future of insurance and risk management.

Can you give me an overview of what’s happening in the construction insurance space right now?

Construction is a big, multifaceted industry, so it should come as no surprise that insurance coverage can be complex. Coverage is heavily influenced by a variety of factors, including geography, specialization, local legislation, the threat of natural disasters, and other variables.

Overall, it is a marketplace that requires brokers to have in-depth knowledge and the ability to navigate its complexities in order to facilitate placing coverage for their clients that is not only as good as they can get from a coverage standpoint, but also from a pricing prospective. It is true that the marketplace is tried and admitted carriers in the space continue to shrink, leaving opportunities lacking in some instances.

In terms of trends, the property market—or builder’s risk—is becoming extremely difficult for higher-value frame construction, and it is shrinking. Supply chain constraints and an increase in building material costs are also factors that are causing complications in the market. Additionally, the umbrella market, or the excess market, is becoming very difficult in many states because there are fewer carriers and it is hugely expensive because of the outsized claims that are bleeding into the excess layers of coverage.

In other words, the first $5 million is excess coverage is becoming increasingly difficult to obtain and it’s becoming more expensive than ever. Another thing that is occurring is the larger commercial general contractors are asking for requirements in insurance policies and limits that very difficult to meet, so that is a challenge for many industry participants. The use of horizontal limits is becoming more critical than vertical limits because many projects are now requiring $2 million per occurrence/$4 million aggregate versus a $1 million per occurrence/$2 million aggregate, which is causing a dilemma in some geographic areas in terms of coverage. The use of captive insurers has also become more prevalent within the space, as well.

What is the construction industry looking for right now in terms of insurance/risk management?

Those in the construction industry are looking for knowledgeable and professional insurance agents; they’re looking for realistic and affordable premiums; and they’re looking for the right coverage—they want to be protected. At the end of the day, it all boils down to cost-savings, proper coverage that will give them peace of mind, and having an agent that knows what they are doing. Construction clients want someone who they can be comfortable with and who has the right team around them to offer support when they need it, but not every agent can offer that.

Like many other professions, insurance has become very specialized today. The insurance business has evolved into such a technical world between the coverage itself and being able to understand the risks that are out there. This is certainly the case in covering the construction sector. With how nuanced the market is, I believe you’re either an expert in handling construction-related accounts or you’re not.

If you’re an agent and you’re going to take on this work, you really need to know the industry and its risks to protect your clients’ best interests while setting yourself apart as a knowledgeable professional. The people who are working in the construction environment, and the law firms working in the construction environment, know the agents who are truly in the construction insurance space—and that expertise is something you can’t fake.