Employee benefits and property/casualty insurance broker and consultant NFP traditionally has grown through acquisitions but as the global organization targets Central Texas for expansion it plans to use another strategy altogether.
NFP maintains a corporate hub in Austin and already has a strong employee presence in Central Texas. It now is aiming to expand its client base there and intends to rely on organic growth to do so.
Private equity-owned NFP ranked ninth on Insurance Journal’s Top 100 Property/Casualty Agencies list for 2017. It has around 4,000 employees, some 150 of whom are located in Austin.
Kevin Brown, NFP’s managing director for retail sales and distribution for the Central Texas market, said in Austin the company has a “robust retirement division,” a large ERISA compliance unit, an actuarial team, a technology center and an HR outsourcing division, all of which support agencies in other locations.
“We already have a significant employee presence here in Austin. We just don’t have a large client presence in Austin,” he said.
Brown, who joined the firm in early November, has been tasked to change all that. The plan is to hire producers and build employee benefits and P/C teams. Most of his work will focus on organic growth in Central Texas, with “a smaller percentage of the time shepherding acquisition discussions throughout the state to expand our Texas foot print,” he said.
In addition to its established organizational hub in Austin, NFP has acquired firms in both Dallas and Houston in the past few years and will likely be adding a few more, Brown said. Around 59 percent of the company’s revenue is generated on the benefits side, with 23 percent coming from commercial property/casualty business. “The remaining falls under what we call our private client wealth management solutions,” he said.
Overall, NFP has acquired more than 150 agencies throughout the country and most, but not all, have rebranded under the NFP banner. Brown said it’s expected that those agencies in Texas and around the country that historically have retained their own name will rebrand as NFP in early 2018.
When looking for acquisition targets, much of what NFP looks for “has to do with the culture, the chemistry and the character that is present in that agency. That is first and foremost before the financials. We are going to be looking for acquisitions of, not just employee benefits firms, but also commercial property and casualty firms throughout the state. We’re looking to expand our presence in Texas … throughout all lines,” Brown said.
Still, Brown’s focus primarily will be on organic growth and he believes there’s a lot of untapped opportunity in Texas, especially in the benefits area.
“I believe that we have to change the paradigm of what clients expect from their broker and consultant,” he said. There are a “lot of strategies that are simply not being implemented. That presents a great opportunity for NFP to grow organically in Central Texas and into other cities throughout Texas.”
For instance, in the areas of health, welfare and employee benefits, “we have to focus on the whole ecosystem of healthcare. Which is not just consulting but also the delivery of healthcare. That includes primary care physicians, specialists, outpatient centers, hospitals and pharmacy,” Brown said.
That approach may include partnering with direct primary care providers, a strategy that is already being implemented in NFP operations in Colorado. The result has enabled customers to rein in costs while still “maintaining high quality and impactful healthcare,” he said.
“We will be partnering with the provider community,” Brown said. “It’s going to be one of the strategies that we believe will be very effective in helping deliver quality care and at the same time give some financial savings on the overall healthcare spending for our clients.”
Before joining NFP, Brown was most recently a market president and statewide employee benefits practice leader at Frost Insurance.
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