Is there a missing component in insurance M&A deals?
Is there a missing component in insurance M&A deals? | Insurance Business America
Insurance News
Is there a missing component in insurance M&A deals?
It’s one thing to strike deals – it’s another to make them work
Insurance News
By
Emily Douglas
Mergers and acquisitions (M&A) are a crucial component of growth and expansion, allowing companies to scale quickly, diversify offerings and even enter new markets. However, according to data from McKinsey, global M&A activity dropped 16% in 2023, to a combined value of $3.1 billion. And while post-pandemic the market is remaining steady, could there be a vital missing component that’s 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’re really interested in whether a company has a culture of innovation, cares about their people, and embodies an entrepreneurial spirit.”
Acquisition experience
Recently, One80 put this into practice when acquiring C&M First Services, a full-service brokerage firm, with Ingraham noting that their strength lies in their powerful niche they’ve carved out 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 they’ve gone very aggressively after that market. They’ve also continued to grow since we bought them.”
Critical components of an acquisition
Integrating diverse products and services post-acquisition is another critical component of One80’s strategy, according to Ingraham.
“We deeply evaluate whether a product offering enhances or potentially conflicts with our existing services,” she explained. “Do they have a distinct different distribution channel? Do they appeal to different elements within the retail market? In which case it would be enhancing even though it might look like the same product? Do they potentially bring in carrier relationships? Do they have very strong carrier relationships that would make us stronger as a company? All of this gets evaluated during the acquisition process.”
This thorough assessment ensures that new products complement One80’s portfolio and strengthen their overall market presence through robust carrier relationships. Ingraham added: “Strong carrier relationships play a pivotal role, as they can significantly enhance our market position and provide additional growth opportunities.”
Diversity within One80’s business model is something that can’t be overstated – something indicative of the wider market in general.
“Our business model is really reliant upon diversity,” said Ingraham. “We take a portfolio approach to our businesses, which gives us a huge advantage. For example, during COVID our travel business was impacted, but our warranty business thrived due to increased demand for tablets in schools. By having this kind of diversity, we hope to weather all of the market changes. The other advantage it gives us is that we have firsthand knowledge of a lot of different segments of the market. So when an opportunity comes to us, at this point we’ve explored that segment – we know it – we know how it’s going to perform.”
Expanding around the world
Geographic expansion is also a key focus for One80, with potential growth into the West Coast, Canada, and Europe.
Ingraham underscored the importance of maintaining the entrepreneurial spirit and fostering new leadership through initiatives like innovation challenges.
“We challenge our next generation of leaders to innovate new products or services, fostering exposure and understanding across our organization,” she said. These challenges not only encourage creativity but also help to identify and develop future leaders within the company. Digital transformation is another significant area of focus for One80.
“We’re expanding our digital quote-buying capability, aiming to improve the retail broker experience and bring products to market faster,” Ingraham explained. This commitment to digital advancement underscores One80’s strategic vision for the future, ensuring it remains at the forefront of industry innovation. And, by leveraging digital technologies, One80 can streamline operations, enhance customer experiences, and introduce new products more efficiently.
“By maintaining our entrepreneurial spirit and fostering innovation, we ensure that every acquisition enhances our capabilities and strengthens our market position,” added Ingraham.
Returning to the notion of fostering a culture of innovation within the company, Ingraham added that they invest in leadership development training – something that could be used to navigate the challenges of the tight labour market right now.
“We run innovation challenges for our next generation of leaders,” she explained. “It’s exciting to see our teams come up with innovative solutions that can take our business to the next level.”
Overall, it’s One80 Intermediaries’ strategic approach to mergers and acquisitions, combined with its emphasis on cultural fit, niche expertise, and digital transformation, that positions it for continued success in a competitive market.
As Ingraham put it: “Our focus on cultural fit, niche expertise, and digital transformation enables us to stay ahead of the curve and continue growing in an ever-evolving market.”
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