After buying JDW, Hub International looks to keep expanding [El Paso Times, Texas]

July 14--Hub International is on a buying spree, which includes a big El Paso purchase last year, that's made it one of the largest insurance brokerages in the world.

The Chicago-based company, with sales expected to surpass $1 billion this year, acquired JDW Insurance last year. JDW, one of El Paso's largest insurance brokerages, was run for years by former state Rep. Dee Margo, who sold his interest in the company before the Hub acquisition.

"If you are not growing, you're dying," said Martin Hughes, 64, Hub chief executive officer, who was in El Paso last week to visit Hub's offices on the eighth floor of the Chase Bank building Downtown. "Our model is to grow the business organically and do acquisitions."

Hub last year spent more than $200 million to buy 29 insurance brokerage firms, including JDW, Hughes reported. It plans to spend about the same amount this year to acquire 25 to 30 more companies. It's acquired 12 companies so far this year, he said. It acquired 300 companies in the last 13 years, making it the world's 10th largest insurance brokerage in the world, according to a ranking by the trade publication Business Insurance.

El Paso is just one of Hub's 300 offices in the United States, Canada, Puerto Rico, and Brazil. It has 6,500 employees, including 74 in El Paso.

Hughes wouldn't say how much Hub paid for JDW, but it was a big acquisition, he said.

JDW's acquisition by the giant Hub comes several years after another large El Paso insurance brokerage, Rogers Belding Insurance Agency, was bought by Wells Fargo Insurance Services, another giant insurance brokerage company.

Wells Fargo, also based in Chicago, is the world's fifth largest insurance brokerage, the Business Insurance magazine ranking shows.

Even with Hub's long list of acquisitions, the company has only scratched the surface because the United States has about 30,000 small insurance brokerage firms, Hughes noted.

"The business is so fragmented," he said.

As an insurance brokerage, Hub specializes in selling insurance policies to businesses and wealthy individuals from a wide array of insurance companies.

Property and casualty insurance policies sold to small and large businesses account for 52 percent of Hub's annual sales, Hughes said. Twenty percent of its business comes from wealthy individuals, and 17 percent comes from selling employee-benefit plans, including health-insurance plans, to companies, he reported.

Obamacare is creating opportunities to grow the health-insurance business, he said.

Hub wanted JDW not only because it's a big El Paso insurance brokerage, but also because it has management that's respected in the community and by its customers, Hughes said.

Hub retained JDW's management, including W. Martin Yung, 53, JDW CEO and partner, who now is Hub's area president. Yung and several other JDW partners now are shareholders in privately held Hub.

Hub has acquired companies in Puerto Rico and Chile, and has its eyes on Mexico, Hughes said. The El Paso office sells insurance to companies operating maquiladoras in Juárez, using a partnership with a Mexican insurance broker to cover both sides of the border, Yung noted.

JDW's sales have been growing about 10 percent a year in recent years, and being part of a larger company provides the resources to keep that growth going, Yung said.

Hub does not release sales numbers for individual offices, but Yung in 2012 reported that JDW brokers more than $150 million in insurance premiums annually.

Being part of Hub "allows us to provide a (high) level of service," Yung said.

Hughes said Hub can provide some lines of insurance that a local brokerage doesn't have the resources to provide. Two examples of those are insurance for directors and officers of companies, and environmental liability policies, he said.

"We keep everything local -- selling and servicing clients -- and we provide centralized services," Hughes said.

Last week was Hughes' first visit to El Paso. Yung took him to the Rim Road lookout in West-Central El Paso to give him an panoramic view of the area.

"I didn't envision such a large city," with sprawling Juárez just across the border, he said.

"There's tremendous opportunity in El Paso," he said.

Vic Kolenc may be reached at vkolenc@elpasotimes.com, 546-6421. Follow him on Twitter @vickolencMore information: hubinternational.com

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