CEO Eslick Shares Lessons Learned in Assembling Marsh & McLennan Agency
In a little over a year, mega-broker Marsh & McLennan quickly assembled one of the largest independent agencies in the nation, entirely through acquisitions. That entity, Marsh & McLennan Agency, targets middle market customers, and is something of an experiment within Marsh. It incorporates a separate board of directors and the agency runs as its own independent business.
That independent spirit — fueled by the influx of independent agents and agencies — is a key part of what will drive success, Marsh & McLennan Agency’s top exec, CEO and Chairman Dave Eslick, told Insurance Journal‘s East Editor Kenneth J. St. Onge.
Insurance Journal: What does the model look like for Marsh & McLennan Agency?
Dave Eslick: We want to take and build a very strong position in the middle market. The people that have been very successful in the middle market are good, strong, local and regional independent brokers. They’ve learned how to compete in the market and how to win. … They’re wellknown within their community. They know what the competitors look like. They know what insurancecarrier markets are, and they can use that knowledge to give them the best chance to win business. Our strategy is to go out and partner with them instead of trying to build a (new) capability.
So we are very much focused on building our platform from an acquisition standpoint and going into business with people who have had great success already in building their business.
IJ: What are the next steps for Marsh & McLennan Agency?
Eslick: We have not put on ourselves any type of annual requirements. This is not a privateequity build (in which we) build something quick, do a bunch of rollups, flip it, and make a decent return on the money. This is about building a longterm, core strategy for Marsh in the U.S., an organization that can drive growth for the next 10, 20 or 30 years. The pressure we’re putting on ourselves is to be disciplined, find great partners to go into business with, quality leadership and professionals, a great colleague base and a great client base. If we get that right, then our future growth will be pretty well determined.
All I would say, relative to the next year, is that you’ll see us announcing more deals and bring out additional capabilities to our current partners.
IJ: Marsh & McLennan Agency has grown entirely out of acquisitions. What makes this a good time for Marsh to be buying — and agents to be selling — insurance agencies?
Eslick: There are a couple of things that make this a good time. A lot of these independent agencies have lived through a very tough two or three years.
With the economy being down, exposures being down, rates being down, it’s been tough and there’s no clear picture whether that’s going to change anything dramatically over the next couple of years. It gives us a great position to sit down and talk with these organizations about — with our tools, resources, capital and ability to share best practices — an opportunity to look at growth capabilities that they couldn’t easily get on their own. But in partnership together with us, they can see an opportunity to expand their business, provide greater opportunities for their colleagues, and maybe put themselves in a position, from a competitive landscape in their marketplace, that they can change that competitive landscape. From that standpoint, our timing is really good.
IJ: Marsh & McLennan Agency has been built as an organization that mirrors the environment of successful independent agencies — namely entrepreneurialism. Why?
Eslick: We want to embrace the entrepreneurial spirit that is embedded in these organizations. But what we’re also doing, by being able to bring together the leaders of these different firms, is being able to share best practices. There’s always a chance to learn. And what you’ll find that’s very dynamic with these entrepreneurial leaders is they’re always interested in the next great idea. It’s very different than kind of a bureaucratic, big company where everybody just wants everything to run nice and easy the way it always has.
These are individuals that are always looking for gamechanging opportunities. From that standpoint, we’re embracing that excitement and that fire in the belly.
IJ: What does Marsh & McLennan Agency bring to the independent agencies it acquires?
Eslick: What we’re trying to do is set up our production talent where they have the most unfair advantage in the marketplace. And so we’re looking to bring together the capabilities of the spirit and the organization they’ve got, the positioning in the community. Along with other valueadded capabilities, we bring to the marketplace great levels of intellectual capital that we can just reach up and grab within Marsh as we need it. It’s a great brand that we can leverage, so if somebody says, ‘I love your service and capability, but I need to be with one of the big players,’ well, we are the biggest.
IJ: How are these independent agencies reshaping Marsh?
Eslick: That’s been, probably, the most interesting part about it. Our Marsh colleagues have given us great support and help. And I’m also seeing a culture in Marsh of people wanting to learn and see how others do business. There’s a lot of work right now at Marsh where they’re looking into Marsh & McLennan Agency and asking, ‘Well, how does (this) agency do things? What does technology look like? What’s compensation look like? What’s sales management look like? How do you win in the marketplace?’
We’re bringing a different look to Marsh, with this different culture and this different organization.
IJ: What do you see as the common elements of high-performing agencies?
Eslick: The best-performing agencies share a number of key items. They run their businesses professionally, and with good discipline — particularly around expense management, so it’s not just a personal piggy bank for the owners. Good agencies do a very strong job in sales management and establish … a culture around sales. …
Another very significant thing: When they capture a client, they want the whole client, so they’re not just doing the commercial property and casualty. They build great capabilities in employee benefits. They build strong capabilities on the personal lines side. So when they get a relationship, they look to get the whole share of a wallet and be a value-proposition — not just in a specific line but across all of the insurance needs of a business.
Editor’s note: This interview was edited for length.