‘Entrepreneurial DNA’ drives Acrisure’s growth
Insurance brokerage secures incentives to move HQ downtown as growing number of agencies join fold.
Acrisure was founded just 14 years ago by entrepreneurs Greg Williams and Ricky Norris, who were committed to maintaining a decentralized approach to insurance agency acquisitions. They believe a mindset of collaboration rather than control has fueled the $1.8 billion company’s exponential growth.
The Business Journal has reported a series of milestones announced by the Caledonia-based insurance brokerage during the past three years, including a plethora of acquisitions between 2016 and 2018, securing a $2 billion preferred equity investment by a New York-based Blackstone-led syndicate in December 2018, a $300 million senior notes offering announced in July to fund more acquisitions and growth, and the plan to roll out an AI-powered insurance platform called Altway next year in partnership with Pittsburgh-based Tulco Labs.
Acrisure also was named to the Inc. 5000 list of the fastest-growing private companies in the U.S. in 2018, landing at No. 1149 for its 428% three-year growth rate and $1.039 billion in revenue — a figure that has since grown to about $1.8 billion.
In July, it was ranked the No. 10 insurance broker in the U.S. by Business Insurance, which noted in its publication that the company has made about 380 acquisitions since its founding, including 200 deals in 2017 and 2018 alone.
But perhaps more locally significant than all of these milestones was Acrisure’s announcement in August that the company will invest $33 million to move its headquarters to the Studio Park development in downtown Grand Rapids, at 123 Ionia Ave. SW, where it will be the anchor office tenant.
The company initially will lease a 105,000-square-foot space in the development’s office tower, which is expected to be completed by the end of 2020. It also plans to occupy 175,000 square feet in a second Studio Park building on the campus, a plan the Downtown Development Authority approved on Aug. 15, according to a previous Business Journal report.
Acrisure provides property, casualty, benefits and personal lines insurance solutions through its network of agencies.
Counting its subsidiaries spread across 37 states and six countries, Acrisure has 450 locations. Locally, Acrisure’s footprint spans multiple locations in the Grand Rapids area, including its current headquarters in Caledonia, at 5664 Prairie Creek Drive SE.
All regionally based employees will be consolidated into one location at Studio Park once construction is complete.
The move is expected to create about 400 entry-level to advanced jobs in the near term, in finance, accounting, IT, human resources, regulatory affairs, carrier market relations, product and strategy development, and more.
But according to Sozon Vatikiotis, COO and chief administrative officer of Acrisure, 400 jobs is just the beginning, as the company has been hiring 100 to 150 employees a year and expects that pace to accelerate.
“This was a very complex, very involved real estate project. … How do you plan to support that growth for not five years but 15 years? Finding a space that gave us that flexibility was actually pretty difficult to do,” he said.
Acrisure looked into building a “mega campus” elsewhere in West Michigan and also considered moving its headquarters to Chicago, where it already has an office.
But the company couldn’t ignore Grand Rapids’ attractions, including “the work-life balance for our employees and the ability to have a number of restaurants and culturally oriented-type activities and facilities and bars and nightlife” nearby, Vatikiotis said.
“Frankly, when you think about places to raise a family, places to recruit people to, places that give someone an opportunity to really be a part of developing a burgeoning city and real estate market, it’s Grand Rapids,” he said, adding he relocated here from Florida a year ago.
“Michigan has been home for Acrisure since day one, and West Michigan has been home since 2009. As we really sat back and did some soul searching, we’re like, ‘Look, we need to embrace this, accelerate what’s being done here and figure out how we can make Grand Rapids home.’”
As part of its talent recruitment strategy for all new and relocated roles, Acrisure will provide downtown parking for employees and increase salaries to cover the Grand Rapids city income tax.
Studio C entertainment company President J.D. Loeks said Studio Park will reap the rewards of Acrisure’s decision to relocate, as the office lease will “increase day-time activation” of the development, which will include a nine-screen movie theater, music venue, hotel, parking tower, public piazza, residential buildings, and multiple restaurant and retail establishments, according to previous Business Journal reports.
A group of economic development partners recently announced their role in sweetening the deal for Acrisure.
The Right Place, in collaboration with the Michigan Economic Development Corporation, the city of Grand Rapids and Downtown Grand Rapids Inc., said at a news conference in Lansing on Sept. 24 that they worked to ensure Acrisure continued its growth in the region rather than expanding out of state.
The MEDC is supporting the expansion effort through the Michigan Strategic Fund with the approval of a $1 million Michigan Business Development Program performance-based grant, as well as a Good Jobs for Michigan withholding tax capture for up to 10 years, valued at $6 million.
Acrisure is the first company in West Michigan to receive support from the Good Jobs for Michigan program.
“(Acrisure’s) decision to locate a new headquarters in Grand Rapids further solidifies our region as a destination for business success,” said Birgit Klohs, president and CEO of The Right Place. “These well-paying jobs will have ripple effects throughout the community and will positively impact the entire West Michigan region.”
Grand Rapids Mayor Rosalynn Bliss said the addition of Acrisure is “vital” for the city and its residents.
“We’re excited for the opportunity to be a part of Acrisure’s incredible growth story, and we look forward to working with the company as it expands in our community,” she said.
Tim Kelly, president and CEO of DGRI, said the move proves that “place matters.”
“In a competitive market, corporations need to appeal to talent, and talent wants to locate in a thriving urban environment where amenities like restaurants, retail and entertainment options are all within walking distance,” he said.
Williams, president and CEO of Acrisure, said the company is proud to be able to call West Michigan home.
“As we continue expanding, we’re pleased with this collaboration to create a true global headquarters in the heart of Grand Rapids. This will be a world-class home for a distinctly world-class company that will enhance our ability to attract and retain talent to the region,” he said.
Vatikiotis said he believes Acrisure’s rapid rise to the top can be attributed to three key aspects of the company:
Williams and Norris’s “entrepreneurial DNA” led them to create a business model wherein Acrisure would take total ownership of its subsidiary agencies but leave them to operate autonomously, with optional support and resources at their disposal but no “mandate” coming from the top.
There is a “culture of collaboration” in which the home office employees support the field agencies so they can continue to carry out their missions.
Its 84% employee-owned structure contrasts with other large brokerage firms that are either private equity-controlled or publicly traded. Although Acrisure receives debt and equity funding, the investors do not receive significant ownership stakes in the company. For example, the $2 billion investment secured from an investor syndicate last year came in exchange for only a 3% ownership stake. Also, when Acrisure acquires an agency, the principals and key employees of the agency receive Acrisure stock and become employee-owners.
“If you’re an agency that wants to continue to grow and build, our model is very appealing because we’re entrepreneurs at heart. We’ve got a great culture and we’ve got an ownership structure that gives us permanence of model and culture and ultimately puts us in a position of being the (beneficiaries) of the value that’s generated,” Vatikiotis said.
“And when you’re an agency that can sit back and say, ‘Hey, I’ve just made a lot of money, and my next 25 years are going to look the exact same as my first 25 years; now I just have more resources,’ we generally get a lot of excitement and partnership around that.”