With its 500th brokerage purchase, HUB International eyes firms in Canada
Employee benefit brokerage firm HUB International completed its 500th brokerage acquisition earlier this year and has begun expanding into Canada to purchase firms north of the border.
HUB has purchased at least five employee benefit brokerages this year so far.
- On May 7, HUB acquired Les Avantages Sociaux Delta, which operates as The dElta Group in the greater Montreal area. The dElta Group team will join Hub Quebec, and d’Eschambault will report to Stephen Blais, president of Hub Quebec.
- In April, HUB bought ES3 Insurance Services Ltd., the parent company of ES3 Advisory, based in Vancouver, British Columbia. Led by Faizal Mitha, vice president of employee strategies, he will join Hub TOS and report to Dave Terry, president of Hub TOS.
- In April, HUB acquired The Benefits Company, a benefit and retirement brokerage based in Windsor, Ontario. TBC will join Hub Ontario, and Rob Tamblyn, president of TBC, will report to Greg Belton, executive chairman of Hub Ontario.
- In March, HUB purchased GMS Insurance, a benefit consultancy based in Kitchener, Ontario, where it services clients in Southwestern Ontario and the greater Toronto area.
- In February, HUB acquired Pointbreak Consulting Group Ltd., based in Burnaby, British Columbia. Kevin Jeffrey, Principal and CEO of Pointbreak, will join Hub TOS and report to Dave Terry, President of Hub TOS.
HUB International did not disclose the details of any transactions.
The Canadian firms HUB bought shared the same roadblocks to expansion. “Their biggest challenge to growing their firm is always the same: access to decision makers,” says Mike Barone, president of employee benefits, HUB International.
Buying up Canadian employee benefit firms made sense, according to Barone.
“We have the desire to build the best EB business in Canada and to serve our customer basis. We are the largest property and casualty insurer in Canada and this can add a broader set of values propositions to those customers,” he says.
The Canadian firms can benefit by HUB’s presence on other parts of the nation, says Barone.
“If you are a firm of $1 million to $5 million firm, you can only invest in so many resources, but if you amalgamate those firms and put resources together,” it benefits these firms, he says. He adds, “You can take one firm in British Columbia who has a specialty in communications, and one in Quebec who focuses on HR value-added services and in Alberta that focuses on tech – we can offer all those across Canada.”
“By joining HUB, we gain scale and the infrastructure for tremendous growth given the multitude of additional resources and capabilities that exist within Hub. This will allow us to provide even more tailored benefits solutions for our clients while maintaining our highly personal approach to administering benefits and retirement plans,” says Roger d’Eschambault, founder and chairman of The dElta Group.
While downplaying the challenges of offering employee benefits in a nation known for universal healthcare and generous parental leave laws, Barone says there are opportunities to deliver American-style benefit offerings.
He says that compared the U.S., the Canadian “voluntary space is immature.”
“Critical illness is just starting to become available across Canada and compared to the U.S., indemnity policies and gap policies are more advanced here than in Canada,” says Barone.
Canada has been such a strong focus for HUB International that Barone will be moving his family from San Diego to Dallas this summer because it is easier to travel to Canada from Texas, he says
Still buying firms in the States
HUB International has not given up on acquiring brokerages in the U.S.
In early May, HUB international purchased The Barnett Group in Nashville, Tenn. for an undisclosed sum. The Barnett Group will join Hub Gulf South, and will continue to operate under the leadership of Ed Barnett.
“They were very eager to take their employee benefit platform and combine it with our Gulf South operation out of Louisiana. Basically, we will learn from what they've done and they will learn from what we have done,” says Barone, adding that this has been the HUB International model since 1998.