Chris Treanor is president of programs and specialties for Hub International Ltd. Based in New York, Mr. Treanor is responsible for acquiring and developing managing general agents and program managers, as well as working with the broker’s leadership and offices to create specialty products. He recently spoke with Business Insurance reporter Matthew Lerner about mergers and acquisitions, market conditions and other topics. Edited excerpts follow.
Has the mergers and acquisitions market changed along with macroeconomic factors like 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 businesses, and a lot of businesses were coming to market because they perceived this “frothiness” in valuations. That created a difficult market because there were too many deals out there – it was hard to cull through all the opportunities. When interest rates rose, it created a flight to quality, which differentiated good sellers. On the buyer side, it became tougher to raise money to fuel merger and acquisition activities, which sidelined some buyers. We find that right now is a really good market for us because there’s still plenty of good, high-quality sellers in the market, and there are fewer buyers than in the last couple of years.
How does the commercial insurance market look for customers?
When you look at 2023, the hardest part of the market is first party, it’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 hardening environment is less inclined to come in because they have alternatives. So, you don’t see the flood of new capital into the insurance market that you typically see in a hard market environment.
We’re also seeing a real focus on increasing valuations for the underlying assets, both because of inflation and over time these valuations had been too low and that was borne out in a lot of loss experience.
How is technology impacting the brokerage business?
We recognize 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 acquisitions and building. Over the next five years, digital is going to be one of the key drivers of the success of the firm. We are doing digital acquisitions and just closed one April 1 — Squaremouth, a travel insurance provider. In 2022, Hub bought Insureon, a large U.S. digital agency.
How difficult is it to acquire and retain employees?
Talent acquisition and retention is always a challenge. Talent is fundamental in an industry like insurance where all we are is our people.
We’ve got an internship program that we’ve developed across the country designed to attract college juniors and seniors into the organization and get them exposed to the insurance industry. We do some campus recruiting, more at the local level.
We are encouraging folks to go back to work because we think it’s important for the people who are developing to be around others from whom they can learn. We are also overlapping more training, and Zoom is very helpful with that.
An acquisitive firm like Hub also gets a fresh talent pool through its acquisitions.