🔒Maine’s insurance industry thriving on growth, change

Over the past year, Bangor-based Cross Insurance has been on an expansion streak, with acquisitions including Maine Insurance Agency of Portland and the Lougee Insurance Agency in Duxbury, Mass. It acquired Harold Humphrey Insurance Agency Inc. and its sister agency, Byfield Insurance Agency Inc., both in Newburyport, Mass., and both specializing in personal and small business coverage.

Last fall, Cross acquired Northern Benefits of Massachusetts, based in Marlborough, Mass. That was followed a month later by the purchase of Patriot Benefit Solutions Insurance Agency, based in North Andover, Mass.

Another significant development within the firm, last fall, was the role change of CEO Royce Cross, who is now active daily in special projects as chairman and founder. His son, Jonathan Cross, stepped into the role of CEO and president.

“Going way back, my father and grandfather have always been buying agencies as they became available,” said Cross. “They expanded throughout Maine and New Hampshire, and we’ve been expanding in other states over the last 10 to 15 years.”

Extensive growth

Like many professional service industries, the insurance industry has been undergoing expansions and transitions in recent years, with acquisitions, C-suite transitions and new hires. Allen Insurance and Financial beefed up its C-suite with recent promotions; State Farm Insurance opened a Lewiston office; and MEMIC plans to insure more small businesses outside of Maine.

Cross Insurance, an insurance brokerage founded in 1954 by Woodrow Cross at his kitchen table, was ranked No. 9 among the largest Maine family-owned businesses in the 2022 Mainebiz Book of Lists, based on the number of Maine employees as of June 30, 2021.

Since its founding, Cross has grown extensively through the acquisition of more than 120 insurance agencies throughout the Northeast. Today, the company has about 1,100 employees operating out of offices in Maine, New Hampshire, Vermont, Rhode Island, Massachusetts, Connecticut, New York and Florida. That includes 387 Maine employees and 14 Maine locations.

Jonathan Cross has played a critical role in the expansion of the company’s insurance services and capabilities, which now span beyond the Northeast and count roughly 1,100 employees, working in more than 40 offices.

The acquisition of Maine Insurance Agency, a fifth-generation family-owned business founded in 1905, was designed to broaden Cross’s service offerings in Maine’s coastal region. The Lougee acquisition and the hire of a risk management director gave Cross a flagship personal insurance advisory presence in the Duxbury region.

Other acquisitions increased the Maine company’s geographic reach and allowed it to broaden its service offerings — all part of the agency’s ongoing strategic plan.

Those plans are in sync with a general trend toward industry consolidation, said Cross.

“Inside the insurance brokerage part of the business, there’s been a tremendous amount of consolidation over the last 10 years,” said Cross. “We’ve been doing our part.”

Consolidation is largely driven by aging demographics, he said.

“A lot of aging business owners might not have somebody coming in behind them to take over the business,” Cross said. “So the next step in their journey is to sell the business.”

Over the last couple of years, most acquisitions have been relatively small shops of two to four people.

Talent acquisition

Those acquiring ways means more hiring at Cross.

Over the last few years, the company has been developing internship programs and programs that bring in potential employees who might not have worked in the industry in the past. Like many industries, insurance is experiencing a labor crunch.

“Talent acquisition is a big part of what we do,” he said.

The goal? To find people who bring traits that make them good team members — then teach them how to be insurance agents.

“We’re looking at ways to get the word out,” he said.

The internship program aims to introduce students to all aspects of the business.

“Traditional internships in the industry would sit the student at a desk and have them do the filing and basic tasks all summer,” Cross said. “We’ve looked to expose them to as many parts of the business as we can over the summer — everything from selling insurance to serving clients to meeting insurance carriers and taking them on job site visits.”

New CEO, new office

Elsewhere in Maine, MMG Insurance in Presque Isle appointed Matthew McHatten to succeed Larry Shaw as president and CEO. Shaw, who retired at the end of 2022 after serving 28 years in the lead roles, is serving as a director on MMG’s board of directors.

MMG is a regional property and casualty insurance company with operations in Maine, New Hampshire, Vermont, Pennsylvania and Virginia. Founded in 1897, MMG writes in excess of $246 million in premiums in partnership with more than 220 Independent agencies across more than 580 locations.

Last fall, Deanna Lynn, who began her career with State Farm Insurance in 1989, opened a new State Farm agency in Lewiston, with a goal of building and supporting the community by protecting vulnerable people with life and renter’s insurance. State Farm and its affiliates are the largest providers of auto and home insurance in the U.S., with 53,400 employees serving over 87 million policies and accounts and revenue of $7.9 billion as of 2019.

In another sign of industry consolidation, Clark Insurance, a 91-year-old insurance agency headquartered in Portland and one of Maine’s largest insurance agencies, said last summer that it was acquired by New York-based Marsh McLennan Agency LLC for an undisclosed price. According to a news release at the time, all 135 employees of Clark would be joining the new parent, a subsidiary of insurance and risk management conglomerate Marsh & McLennan Cos. Inc. (NYSE: MMC). Marsh McLennan Agency operates 160 offices across North America and employs about 9,000 people.

Covering more small businesses

In Portland, the MEMIC Group has plans to insure more small businesses outside of Maine.

MEMIC is a Portland-based workers compensation insurance company that includes MEMIC Indemnity Co., MEMIC Casualty Co. and parent company Maine Employers’ Mutual Insurance Co.

MEMIC provides insurance in 46 states and covers a total of more than 22,000 employers and an estimated 300,000 employees.

“We’ve done business outside of Maine for over 20 years now and have grown significantly, but more in medium- and larger-size businesses,” said MEMIC’s president and CEO, Michael Bourque.

Most small businesses have infrequent worker compensation claims, so they haven’t had a reason to consult with insurance specialists and might not understanding its intricacies, he said.

“In many ways, having a specialist is even more important as a small business,” said Bourque. “Knowing that we’ve been successful in Maine, we decided to look beyond Maine and offer that small business product.”

The small business product is called MEMIC Express. “We plan to grow MEMIC Express by 17% this year, but we’re at 27% year-over-year growth as the first quarter wraps up,” said Bourque.

Across the group, MEMIC had just over $400 million in total premiums in 2022 and expects to grow total revenue by 5% in 2023.

MEMIC has 500 employees, a slight rise from 2019. Just over 300 are Maine. Others operate in regional offices in Manchester, N.H., Albany, N.Y., Glastonbury, Conn., and Tampa, Fla., or they work remotely. Before 2020, MEMIC had two additional locations — in Weehawken, N.J., and Tyson’s Corner, Va. — but decided not to reopen them because employees were happy telecommuting.

Plans to expand the small-business line outside of Maine has resulted in a bit of hiring. But MEMIC is focusing on process and systems improvements to streamline the ability of existing agents to handle extra business.

“We’re gaining efficiency,” Bourque said. “Technology makes it easier to expand.”

But continual investment is on the docket. “Automating portions of what we do with new technology has become a benefit,” he added.

Beefing up the C-suite

Allen Insurance and Financial — Maine’s largest employee-owned independent insurance, employee benefits and financial services agency, founded in 1866 — recently beefed up its C-suite with promotions.

Effective Jan. 1, Dan Bookham, Peter Williams and Susan Howland joined the leadership group.

With just under 100 employee-owners in Belfast, Camden, Rockland, Southwest Harbor and Waterville, the new leadership team is well poised to embrace the agency’s goals for continued growth and exemplary client service in 2023 and beyond, said Michael Pierce, the agency’s president.

“Measured and intentional growth, both organically and via thoughtful acquisition, has been our growth plan,” said Pierce.

He continued, “Bigger isn’t necessarily better, but having enough size and depth of knowledge in the markets we represent is important. More so, however, growth is important culturally as it allows for career development paths for our employee-owners which is significant as a 100% employee-owned and Maine-based organization.”

Fueling that activity includes the 2022 acquisition of the GHM Agency in Waterville, with 20 employees. The agency also experienced organic growth across its insurance, employee benefits and financial planning divisions. Additionally, it has insurance specialists in select niche markets — craft beverage and cannabis, land trusts and farms, campgrounds, and tall ships — designed ot support the unique needs of the specific markets.

 The agency has a history of working along the coast but today, the client base and reach extend across the country. Demographically, Maine continues to be one of the oldest states in the country, “but we witnessed and benefited from some inward migration through the pandemic, particularly in the real estate and retirement planning markets,” said Pierce.

Revenue more than doubled over the past decade and the ESOP share price is at an all-time high.

“Between organic growth and current inflation, we expect revenue to continue to trend quite favorably,” he said.

Goals for the coming year including continuing the current path forward and achieving additional market penetration in its select markets.

“Additionally, however, we are looking to expand our connections with other like-minded companies,” Pierce said. “In particular, the ESOP community is one of camaraderie and accountability which fits will with our own organizational model. We are happy to note that we were just selected as the 2023 New England Chapter ESOP Company of the Year — so 2023 is off to a great start!”