Banking & Finance and Economic Development

Insurance agencies benefit from ‘economic tailwind’

Two area business insurance agencies report growth as they assess diversification, talent gap.

January 20, 2017
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It was a whirlwind of a year for Berends Hendricks Stuit (BHS) Insurance Agency and Lighthouse Insurance Group.

The two multimillion-dollar insurance agencies closed a number of acquisitions and hired dozens of agents and support staff last year.

BHS Insurance, with a local office at 3055 44th St. SW in Grandville, reported total business insurance premiums of $254,250,000 in 2016, up from $244,070,000 in 2015.

Zack VandenBerg, vice president of BHS, said the agency’s new business was up significantly last year, mostly because of overall economic growth across all industries.

“There’s a little bit of an economic tailwind going on,” he said. “A lot of our clients are doing well, experiencing sales and revenue growth; they’re hiring and increasing payroll.”

VandenBerg said as the company has grown, it has branched out its practice groups in the business insurance department.

BHS has created niche practice groups for the major industries its clients represent: manufacturing and wholesaling, construction, not-for-profit and public entities, botanical gardens all over the country, the major craft breweries in Grand Rapids, automotive entities and the trucking industry.

“I think one of the trends, obviously, is we are becoming much more, as you can tell, niche and industry-specific focused,” he said. “Years ago, you used to have insurance agents that were jacks-of-all trades, but as the world gets more technical and diversified, so do we.

“We are being relied upon quite a bit more for consulting, rather than just placing insurance policies. That would have to do with risk management, human resource consulting and wellness.”

VandenBerg said in the past, insurance agents acted only as brokers of insurance policies, but now, BHS is shifting to “a consultative approach” to help businesses prevent risk.

Lighthouse Group, 4808 Broadmoor Ave. SE in Grand Rapids, takes a similar view of the changing industry. With reported business insurance premiums of $274,600,000 in 2016, over $267,000,000 in 2015, the company has put its resources toward acquiring other companies and meeting a need in the growing marketplace.

“There’s really been a need for help with clients,” said Geoffrey Widlak, executive vice president at Lighthouse. “There’s so much consolidation in our industries that people are looking for good, quality advice, so it’s tough for that small agency to be competitive with the larger agencies because of all the consolidation.

“I think as an industry, we need to continue to be really focused as insurance companies and insurance advisors on building insurance programs that are really customer-centric.”

Besides acquisitions, Widlak said Lighthouse also is focused on hiring.

“We’ve done a lot of hiring new to industry,” he said. “There’s a huge talent shortage that’s starting to happen in our industry.

“Ernst & Young said in 2017 alone, there would be 70,000 insurance professionals retiring. It’s huge the shortage of people we’re going to experience over the next several years. So, we’ve been investing in building a new hiring program, a new recruiting program and adding a ton of people who are new to industry.”

VandenBerg said although BHS did acquire one company in 2016, it mostly is focused on “growing organically.”

“When I say organically, that’s by going out and gaining new clients, rather than by acquisition. Not that we’re opposed to acquisition, but our real focus is on gaining and attracting new clients. The way you do that is to hire the best possible people and the best possible team, because so much of our business is built on relationships.”

Widlak and VandenBerg said some of the challenges beside the talent gap and diversification are the need to keep up with changing technology and health care compliance.

But all in all, they said 2017 is shaping up to be a good year.

“The economic forecasts I’ve read are pretty favorable for 2017,” VandenBerg said. “That will be in favor or be a tailwind for a lot of business insurance providers.”

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