Chris Treanor is Head of Programs and Specialties for Hub International Ltd. Based in New York, Mr. Treanor responsible for acquiring and developing top general agents and program managers, as well as working with brokerage management and offices to create specialty products. He recently spoke with Business insurance reporter Matthew Lerner on mergers and acquisitions, market conditions and other topics. Edited excerpts follow.
Has the M&A market changed along with macroeconomic factors such as inflation?
If you go back 12 to 24 months, it was a real feeding frenzy. You had a lot of capital in the market to buy companies, and a lot of companies came to the market because they perceived this “fuzziness”; in valuations. It created a difficult market because there were too many deals out there – it was hard to sift through all the opportunities. As interest rates rose, it created a flight to quality, which distinguished good sellers. On the buyer side, it became tougher to raise money to fuel M&A activity, putting some buyers on the sidelines. We think right now it’s a really good market for us because there are still plenty of good, high-quality sellers in the market, and there is fewer buyers than in recent years.
What does the commercial insurance market look like for customers?
Looking at 2023, the hardest part of the market is first party, that’s property. You had a punishing 2022 in terms of catastrophe losses, and because interest rates are up, the capital that would normally flow into the market to take advantage of the tightening environment is less likely to come in because they have options. So you don’t see the influx of new capital into the insurance market that you typically see in a tough market environment.
We also see a real focus on increasing the valuations of the underlying assets, both due to inflation and over time these valuations had been too low and this was confirmed by many loss experiences.
How does technology affect brokerage operations?
We realize that more and more of our customers want to interact with their insurance provider in different ways. We want to give them an omnichannel option through a combination of acquisition and construction. In the next five years, digital will be one of the most important drivers of the company’s success. We do digital acquisitions and just closed one April 1st – Squaremouth, a travel insurance provider. In 2022, Hub bought Insureon, a large American digital agency.
How difficult is it to acquire and retain employees?
Acquiring and retaining talent is always a challenge. Talent is fundamental in an industry like insurance where all we are are our people.
We have an internship program that we have developed across the country designed to attract college juniors and seniors into the organization and expose them to the insurance industry. We do some campus recruitment, more at a local level.
We encourage people to go back to work because we believe it is important for the people who are developing to be around others who they can learn from. We also overlap more training, and Zoom is a big help with that.
An acquiring company like Hub also gains a new talent pool through its acquisitions.