Hartford Business Journal

www.HartfordBusiness.com December 14, 2015 • Hartford Business Journal 3 Aging biz owners create opportunities, risks for insurance industry By John Stearns jstearns@HartfordBusiness.com G lastonbury-based Smith Brothers Insur- ance LLC has acquired eight insurance agencies in the last five years, the latest being Bayberry Insurance of Groton this fall, making Smith Brothers one of the largest inde- pendently operated insurance and financial services organizations in Connecticut. And it's not done yet. With about 150-plus employees, mostly in the Nutmeg State, including 90 in Glaston- bury, Smith Brothers has ambitions to dou- ble in size over the next five years, through organic growth and more deal-making, said Joe Smith, president and CEO of the firm founded in 1972 by his uncle and late father. Driving that opportunity, in part, is demo- graphics. There are myriad small insurance agencies with aging owners looking for suc- cession plans and who have business niches and staff attractive to Smith Brothers. Smith estimates a solid decade ahead of agency owners looking to exit their business. That seems to be supported by an October report by BlumShapiro and the University of Connecticut, "The Baby Boomer Effect," which found that 42 percent of small business owners in Connecticut are 55 and over, a number that is estimated to reach 47 percent in 10 years. "With business owners aging, the pace of sales and transfers of ownership will likely increase," the report said. The insurance brokerage industry in par- ticular is experiencing a significant amount of mergers and acquisitions, especially in the last decade and more so recently, said Mary Christiano, director of communica- tions in Connecticut, New Hampshire, New York and New Jersey for Professional Insur- ance Agents, a nationwide trade association representing professional, independent prop- erty/casualty insurance brokers. About 13 percent of independent insur- ance agencies were involved in M&A activity in the past two years, up from 11 percent in 2012, according to an industry study pub- lished by Independent Insurance Agents & Brokers of America and leading independent agency companies. Deal-making was particu- larly prevalent among larger firms gobbling up smaller competitors, which are facing increasing challenges of maintaining busi- ness viability, the report said. Aging agency ownership and a lack of awareness for agency continuation are major concerns, Christiano said. "We're very concerned about perpetuation in the industry," she said, noting the graying effect isn't unique to insurance brokers. "We are challenged to have new people come into the industry." Insurance isn't a job young people think Smith Brothers Insurance Past Acquisitions 2010: Charter Oak — The Insurance Professionals, Groton 2012: Camilleri & Clarke, Wethersfield 2013: Elliott Insurance Group, Southington 2014: Atlantic Insurance, Waterford 2014: Archambault Insurance, Chester 2015: The McMahon Co. Inc., Rocky Hill 2015: Carillo & Howland Inc., Windsor Locks and Somers 2015: Bayberry Insurance, Groton 860.871.1111 Toll Free: 800.741.6367 nemsi.com License #'s: E1-104939 • S1-302974 • P1-203519 • F1-10498 • SM1-192 • MC-1134 MECHANICAL • ELECTRICAL • PLUMBING • SHEET METAL • BUILDING AUTOMATION • FACILITIES SERVICES FACILITY SOLUTIONS…ONE SOURCE Only one company can build, power, protect, and maintain the critical systems in virtually every type of facility. Our clients trust us to deliver end-to-end facilities solutions, so they can focus on their core business. We design, install, maintain, and protect systems in: Industrial Facilities Manufacturing Facilities Commercial Facilities Higher Education Facilities Healthcare Facilities Pharmaceutical Facilities Continued UNAMI SILVER S Connecticut's Smith Brothers Insurance President and CEO Joseph B. Smith (shown right in photo) said he wants to double the size of his insurance agency over the next five years through acquisitions and organic growth. His sister, Kimberley Connolly, the agency's executive vice president, is co-piloting that growth strategy. P H O T O | C O N T R I B U T E D

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