When it comes to growth, acquisition is the name of the game at North Carolina-based BB&T Insurance Services. Thanks to an aggressive string of purchases in recent years, the Raleigh-based subsidiary of the $91-billion-asset Winston-Salem-based BB&T Corp. has emerged as the eighth-largest insurance broker based in the United States. In recent weeks, BB&T Insurance Services continued to generate acquisition headlines with late-summer announcements to acquire Cooper, Love & Jackson, a Nashville-based agency specializing in commercial risk, employee benefits, and personal lines; and plans to expand title insurance activities via the purchase of Raleigh-based Surety Land Title. Thanks in large part to its aggressive acquisition posture, BB&T Insurance revenue from agencies has climbed steadily throughout the past decade. From 2001 to 2002 alone, revenues jumped from $172 million to $291 million.
In the following interview with contributing editor Karen Holliday, BB&T Insurance President Wade Reece--a 25-year company veteran outlines BB&T's growth-by-acquisition insurance strategy, while distinguishing the hallmarks of a successful integration program.
ABABJ: BB&T's experience in the insurance business dates back to 1922 with the acquisition of the Independent Agency based in Wilson, N.C. How did this long-term perspective shape BB&T's philosophy regarding organizational structure and integration of insurance activities?
Reece: One thing that sets us apart is that we often say that none of us can remember when BB&T wasn't in the insurance business. More than 75 acquisitions have been completed since the first one, and geographically, we operate 74 agencies in ten states from Maryland to Florida. Over the years we gained a wealth of experience through working on successful and unsuccessful initiatives. Throughout these endeavors, BB&T's corporate philosophy, core values, and beliefs have over time been the greatest influence on how we operate BB&T Insurance.
ABABJ: What are some of these corporate "core values"?
Reece: Honesty and integrity are critical corporate values that transcend any boundaries in business lines or geography. At BB&T Insurance, we are centralized from a systems standpoint, but decentralized in terms of how our insurance people manage their customer contact. We place a lot of responsibility and accountability on our managers. Given our size and scope, we would not be able to do that if we did not share common cultural viewpoints with our parent company and our acquisition partners on the insurance side regarding integrity. Additionally, BB&T enjoys an entrepreneurial philosophy throughout the entire corporation that encourages independent thinking. That has been a factor in the way we seek insurance partners and potential acquisitions.
ABABJ: Strategically, there's the issue of growing from within versus acquisition. Obviously, BB&T has been very acquisitive in the insurance arena. Why did you choose to go this route?
Reece: We wanted to grow our insurance business rapidly, like many fee-based businesses, but be professionally consistent with our quality commitment to our clients. Targeting the best, most professional agencies met both growth and quality standards. While we have always viewed acquisitions as a way to get us on the playing field, it's what you do with the acquisition after you own it--your organic growth--that matters.
Our organic growth varies by geography. Once an agency comes on board, we don't just say that every market is going to grow organically by the same set percentage each year. We look at the nuances of our individual markets and make goal-setting a constructive process that we can all learn from. Strong sales are a priority and we incent agency principals to beat the established criteria and we recognize our sales victories. We also stress relationship-building with our bankers. …