by P.E.KelleyMr. Kelley is managing editor of the magazine. Connect with him by e-mail: [email protected]
In this industry, the evolving distribution equation continues to be of critical concern to the players involved, especially those working in the senior market space. From manufacturers with a sharp eye on the effective flow of products, to agency owners with a keener eye on profitability and succession, the delivery chain requires, more than ever, viability and cost-efficiency. Integrity Marketing Group, a Dallas-based, independent distributor of life and health products, has spent 2018 advancing an aggressive and strategic acquisition plan of agencies that will provide a national geographic-solution of growth, according to its co-founder, Bryan W. Adams. A central part of this strategy, he says, allows agency-owners to ‘take some chips off the table,’ while remaining active and involved in continued growth.
We spoke with him about his company’s vision for expansion and growth, which is rooted in a deep knowledge of the products supporting the senior market, the vagaries of viable distribution and the distinction of what he defines as a ‘partnership strategy.’
PEK: Tell me about Integrity Marketing Group’s roots and history.
BA: Integrity Marketing Group develops and distributes life and health insurance products with insurance carrier partners and markets these products through its distribution network, which includes other large insurance agencies located throughout the country. We are one the largest independent marketing organizations of senior life and health protection products in the industry.
Integrity’s existing portfolio in the life and health space includes, Medicare Supplements, Medicare Advantage products, life insurance and annuities, final expense and long-term care insurance, as well as other senior health products (e.g., Medicare prescription drug plans, cancer, disability income, income, hospital indemnity, dental, vision and hearing insurance).
There are 350 employees and we work with more than 130,000 independent agents nationwide. In 2018, Integrity will help insurance carriers across the country place over $850 million in new premiums.
We have tripled our annual revenues and EBITDA and doubled our headcount since July 2016 through organic growth and 13 add-on acquisitions. This growth has made Integrity the preferred partner for insurance carriers and we’ve become the nation’s leading independent distributor of life and health insurance products focused on serving the Senior Market.
The company is on pace to triple again in the next 24 months.
PEK:What is your long range acquisition strategy, and what kind of agencies are you targeting?
BA: Underpinning Integrity’s M&A activity is our desire to maintain the geographic reach that will make Integrity the top choice for the senior market among all major insurance carriers. We currently have relationships with every major carrier in the senior market today.
Our acquisition strategy is focused on quality agencies whose owners want to “take some chips off the table” but stay involved. This is not a situation where we are just buying a book of business. Rather, the owners become partners in Integrity and stay on to run their individual businesses.
Integrity maintains its edge over other wholesalers looking to acquire agencies, in part because of the vested stake that the top executives of acquired distributors have as new partners in Integrity as a result of these mergers.
PEK: How does this acquisition/consolidation help carriers with products and distribution?
BA: Insurance carriers have a desire to work with fewer distributors, who have a national footprint as well as scalable technology platforms, training, regulatory compliant distribution methods and resources to serve producers. We provide the most efficient distribution system for carriers to launch their products and expand their sales in the senior market.
In addition, insurance carriers can underwrite products that Integrity develops for them without having to do their development in house. This significantly simplifies the product development process for carriers.
PEK: What is Integrity’s typical acquisition profile and the value-proposition offered to these companies?
BA: Integrity offers a great value proposition for insurance agency owners looking for a succession plan. We make it possible for an owner to take some of his equity out of the business, and yet, stay involved with his company and its management. The owners now have an opportunity to join a bigger group that has more scale and capacity and they receive access to Integrity’s “carrier contracts, product diversity, product development initiatives, and marketing and technology platforms.
In addition, these insurance agency owners have assurance their legacy will continue to grow and continue to operate under the agency’s strong brand and their staff will maintain their current roles and continue with business as usual.
PEK: What market forces/market conditions support your aggressive acquisition strategy? Do you have an overall growth target?
BA: We don’t have an exact growth target, other than just wanting to partner with really good businesses with great reputations in the market. We have been very fortunate to have some of the biggest names in the Senior Market contact us to help with their succession plan. In fact, we have been approached by the founders of every deal we’ve done to learn more about being part of our larger, more diversified business.
Rather than an acquisition strategy, we refer to what we’re pursuing as a partnership strategy. Every transaction we’ve made included the founder re-investing a large amount of their proceeds into Integrity and continuing to be a partner in the overall business.
We’re solving a succession planning need in the market and we can help many more like-minded people address this need.
PEK: So, how far do you go with this strategy?
BA: Integrity will continue to make acquisitions of like-minded firms – and we are certainly open to entertaining additional buyouts. We get a great benefit from acquiring firms that are industry leaders, with strong regional footprints, well known for the services they offer and the relationships they’ve built.
We complement our M&A with a strong organic growth effort. We focus on giving our advisors more services, better tools and systems to meet with more clients and do more business, including access to top contracts with leading insurance companies, back office support and value-added services, s ales and marketing systems, lead support and incentive trips.
With the depth of carrier and distribution relationships and product expertise, Integrity is uniquely positioned as a platform for future growth. Between our strong leadership in place today, and our appetite to expand our leadership through existing and new partnerships, I can see Integrity continue to grow.◊