- change ups
Hub Gets 53s Insurance Unit
The $37 million acquisition includes Fifth Third Insurance Services offices in Grand Rapids, Holland, Kalamazoo, Petoskey, St. Joseph and Traverse City, all of which will now come under the banner of Hub International Midwest.
The purchase also adds new Hub offices in Indianapolis and Evansville, Ind.
The newly acquired insurance brokerage generates about $27 million in annual revenue and serves about 50,000 customers, said Roger Forystek, president of Hub International Midwest.
Property and casualty lines comprise about 70 percent of the business. About 20,000 customers are business clients while the remaining are personal lines clients, he noted.
With acquisition of the Fifth Third insurance brokerage, Hub International created its 11th regional "hub," each of which provides insurance brokerage services and manages the Hub International offices within its territory.
Besides property and casualty, life and health, and employee benefits, the company offers investment and risk management products and services through offices in the United States and Canada.
All former Fifth Third staffers were retained in the acquisition, Forystek said, and jobs will be added over time in the Michigan communities in which Hub now operates.
It will be six months or so before the company determines where new jobs will open up, he noted. Hub is working through the details now and expects Fifth Third's name and signage will be replaced with Hub International's at all locations by early March.
Hub International already had a presence in West Michigan via its subsidiary, Battle Creek-based Burnham Insurance Group, a regional insurance broker with offices throughout Michigan and in Chicago, Cleveland and Dallas.
Burnham Insurance specializes in bank insurance and has been a player in the Michigan banking industry for 25 years. Burnham joined Hub International in July 2001.
At some future point Burnham will take on the Hub name, too, Forystek said.
Fifth Third Insurance Services and Hub International had an established relationship before the acquisition. The two companies made referrals back and forth, and Forystek said that relationship will continue.
"I think what happened here was that Fifth Third looked on a long-term basis at some of the cultural differences between insurance and banking. Where we are more into protecting assets and indemnifying people, the bank is really more focused on accumulating assets and savings," he explained.
"Though we worked extremely well together, we just decided both companies probably could grow better apart rather than together."
As Fifth Third started looking around for the right partners for its insurance group, Hub emerged as the right place because of its like culture of decentralization and local autonomy, he said.
"There will be little impact on customers from the standpoint of who they're dealing with or anything like that. We thought it was just a really good structure to move from one company to the other."
He believes Hub International can offer former Fifth Third Insurance Services clients not only a broader range of services, but also a broader number of markets through insurance company relationships.
"We're going to be able to enhance our insurance company relationships, for instance, because we have excellent relationships with Travelers, Chubb and a number of other national groups"
Hub USA, formed in 1998, is made up of a number of insurance agencies around the country that have come together and combined their different specialties.
Each of the agencies has a specialty that helps them dominate in their market, Forystek said. At the same time, they lend their expertise to Hub offices in other markets.
For example, Hub Midwest, including the new Fifth Third insurance brokerage, is big in construction, service, manufacturing, transportation, medical malpractice and other medical types of coverage, he said.
"The reality is, to grow in this business you need to have people who are specialists in one to two market areas who can really grow that area for you because people are buying the expertise of people," Forystek explained. "As a result, we think that together we can enhance that between the areas where we do business."