Insurance Brokers (MMC, AON, AJG, WTW, BRO)

[dealraker]

I'm not going to state much about the broker business as I'm not in any way up to date and feel that all I can offer is bias which isn't helpful.  I do spend a lot of time with probably my best friend who is still in the business, he has a lake house that he lives in half the year that's a quarter mile from my home, so summer we are together often.  His firm now is 45 people.

 

Anyway we do generally talk the business at least some when we get together.  What's interesting is the two things we most have watched affect the broker prices, that's soft markets and AI, are things he simply doesn't even mention.  I do bring them up of course and he sort of comes back with what I'd call a "normal stuff" position.

 

His most worrisome issue is that he doesn't want to sell the business, but he now doesn't want to be on task but 4 hours or so a day- he and his wife travel, and his two sons are not particularly motivated and honestly not very capable.  He does have a middle age woman who he says can and for the most part - and actually does - run the business.  This woman has a daughter who just graduated and joined the firm who my friend says, "She will be both my son's boss within a couple of years."

 

He is delighted with the overall conditions of the insurance business, says opportunities are endless and competitors aren't a problem.  This is a guy who never went to college, he joined his father's one man operation when he was 18, he's now 67.  He's also an aggregator major owner, that is a 6 part ownership thing and he has personal and via his business ownership of 5/6th's, and there's one other 1/6th owner.