Top insurance brokers, No. 10: TIH Insurance Holdings LLC

2023 brokerage revenue: $3.39B
Percent increase: 9.9%

TIH Insurance Holdings LLC, formerly Truist Insurance Holdings Inc., announced its new name and rebranding in early May after its former bank parent sold the unit to private-equity investors.

The sale by Truist Financial Corp. will lead to significant changes to the brokerage’s positioning in the market, its top executive and other experts say. 

An investor group led by private-equity firms Stone Point Capital LLC and Clayton, Dubilier & Rice LLC bought the brokerage in two stages. Twenty percent was sold for $1.95 billion in February 2023, and the remainder was sold for $10.1 billion this year. 

Truist said the all-cash deal valued the brokerage at $15.5 billion, or 18 times TIH’s core 2023 earnings before interest, taxes, depreciation and amortization, a standard metric for brokerage valuations. 

Dan Glaser, former CEO of Marsh & McLennan Cos. Inc. and operating partner at Clayton, Dubilier & Rice, was named chairman of TIH.

The deal is “transformative” for the brokerage, said John Howard, CEO of Charlotte, North Carolina-based TIH.

“It dramatically improves our positioning,” he said. “It means that we have more agility than we had in the past. We’re no longer subject to the risk appetite and regulatory requirements of a bank. We’re able to focus all of our time, energy, and resources on insurance.”

“It’s going to be interesting to see how they evolve from this kind of highly regulated environment to now being set free,” said Timothy J. Cunningham, managing partner at Optis Partners LLC, an investment banking and financial consulting firm in Chicago. “What’s going to emerge from the cocoon? What kind of butterfly might it be?”

The broker may undergo a cultural shift away from its former owner, Mr. Cunningham suggested. “They’ve been bank-owned for so long; are they in a position to make that shift so they’re managed in a little bit more entrepreneurial style?” he said.

“They’ve become liberated,” said John Wepler, chairman and CEO of Woodmere, Ohio-based mergers and acquisitions consultancy Marsh, Berry & Co. Inc. 

“They have a national platform. They have a portfolio approach with all these distinctive brands. They know how to acquire and integrate. They’ve got a really strong wholesale operation. They’ve got a diversified line of business, from retail and commercial to sophisticated employee benefits with actuarial compliance,” he said.

TIH will benefit from an employee ownership structure and compensation incentives and can be more flexible with potential acquisition structures, Mr. Wepler said.

TIH has 1,500 employees with equity in the company and has launched an equity program to enhance compensation, Mr. Howard said. The program will help recruitment efforts, he said.

TIH reported $3.39 billion in brokerage revenue in 2023, a 9.9% increase over 2022, which was restated to exclude revenue from those businesses that remained with the bank following the 2023 minority stake sale. The brokerage slipped two positions to No. 10 in Business Insurance’s ranking of the world’s largest brokerages.

TIH reported organic growth of 6.9% in 2023, which was due to a combination of exposure increases and new producers and teams joining the company, Mr. Howard said.

Exposure increases may slow as overall economic growth slows, Mr. Howard said, “so you’re seeing less of a tailwind in those areas than what we’ve seen in recent years.”

The TIH deal came on the heels of Aon PLC’s $13 billion purchase of NFP Corp. 

More large deals among brokerages may follow, Mr. Howard said.

“Do I think it’s possible that you could see combinations amongst some top 20 brokers? Yes, I do. In fact, I’ll be surprised if it doesn’t happen,” Mr. Howard said.

TIH also announced several senior executive hires and restructurings at a couple of its units over the past 12 months.

Last month, TIH named former Brown & Brown executive Mike Conway as chief financial officer and former Piper Sandler & Co. managing director Chris Grady as executive vice president and head of strategy and corporate development.

In December, it reorganized McGriff Insurance Services LLC, its retail commercial insurance unit, into three geographic regions and restructured its wholesale operations into two divisions, one focused on wholesale broking and the other on underwriting.