Top insurance brokers, No. 6: Hub International Ltd.

2024 brokerage revenue: $4.77B
Percent increase: 11.8%

Hub International Ltd. secured additional funding in May, an investment that could foreshadow a public listing, but its top executive says the brokerage remains focused on organic growth and its longstanding acquisition strategy.

Hub remained a top acquirer last year and is well-positioned to continue that thanks to the recent $1.6 billion investment, which valued the company at $29 billion.

The investment was led by funds advised by Baltimore-based T. Rowe Price Investment Management Inc., New York-based Alpha Wave Global LP and Temasek Holdings (Private) Ltd., a Singapore sovereign wealth fund.

A 2023 investment valued the brokerage at $23 billion.

“From my seat, the capital markets rewarded Hub on the backdrop of a very volatile stock market for the business we’ve built and the prospects going forward. It’s very gratifying for us,” said Hub CEO Marc Cohen.

The investment community’s move is a significant achievement that “reflects well” on Hub, said Timothy J. Cunningham, managing partner at Chicago-based Optis Partners LLC.

“The proof is in the pudding,” he said.

While the investment could set the stage for an initial public offering, Mr. Cohen said that would not likely happen until 2026 or 2027.

“Our focus continues to be on building a strong company for our employees and our clients by investing in deliverables and strategies that differentiate Hub,” he said.

Hub was the second-most acquisitive broker in 2024, with 61 deals, down 8% from 65 in 2023 and a 10.2% decrease from 68 in 2022, according to Optis.

Hub reported $4.77 billion in brokerage revenue in 2024, slipping one spot to No. 6 in Business Insurance’s ranking of the world’s largest brokerages. The company reported organic growth of 7.3%.

The brokerage was the third-most active buyer in the first quarter, with nine acquisitions, Optis said.

Hub has amassed “a really nice platform between commercial P/C, employee benefits, personal insurance and wealth management,” Mr. Cunningham said.

Hub uses “a very consistent litmus test” when making acquisitions that looks at a company’s history of organic growth and its culture for prioritizing new business and growth, Mr. Cohen said.

Target companies must have a solid producer base and a desire to take advantage of Hub’s shared resources, product specialization and industry verticals, he said.

Hub also “doubled down” on industry verticals such as education and renewable energy and continued to focus on digital platforms, whether they were commercial lines, personal lines or digital managing general agencies, Mr. Cohen said.

Although economic conditions will not likely affect M&A activity in the brokerage industry, Mr. Cunningham said the market has made buyers more selective.

Hub’s 2024 performance resulted in Moody’s Investors Service boosting it from a B3 to B2 corporate family rating, said New York-based Evelyn Ocas Salazar, a Moody’s Investors Service assistant vice president.

Despite the economic slowdown, Hub has maintained positive organic growth and strong retention, she said.

“What they really push for is new business generation, and they’re very successful in doing that. They have created a company with good verticals and good integration into their own hubs that can source business from different regions, create different expertise and keep expanding,” she said.

The brokerage’s continued growth stems from its slow and steady execution of its business strategy, which involves acquisitions in regions where it believes it needs a presence, rather than large, transformative acquisitions, Ms. Salazar said.

“The company has been steadily growing and delivering on the metrics that we expect to see for a broker of that size in terms of leverage,” she said.

While firmly rooted in the North American market, Mr. Cohen said the brokerage is “open to the right opportunity” for any expansion overseas.

Even though the Canadian market, where Hub has a significant presence, is a bit slower and experiencing “a very different rate environment,” Hub will perform in line with expectation of its rating, Ms. Salazar said.

“The company has a good track record on delivering strong margins,” she said.