Benefits Broker Sees More Mergers Coming

The Carmel office of insurance benefits broker Arthur J. Gallagher & Co. just made its sixth acquisition in five years, and it expects looming changes to tax and health laws, to produce even more chances to snap up benefits brokers this year.

The local Gallagher office acquired DeHart Benefit Solutions on Jan. 4. President Becky DeHart brought over about 50 clients, whom she now serves under the Gallagher umbrella.

Meanwhile, Illinois-based Gallagher tapped Dane Hudson - the man who engineered the six deals in Indiana - to pursue acquisitions in 11 Midwestern states. Hudson still works out of the Carmel office, but Gallagher's operations are now led locally by longtime benefits broker Jess Stump.

Stump, who joined Gallagher by selling his business in 2008, will continue to serve all his old clients, as well.

"It's a great way to grow when organic growth is slow," Hudson said of Gallagher's acquisition strategy. "The interest is huge from a merger-partner prospect standpoint."

A big factor driving interest this year, Hudson said, is the prospect that the capital gains tax cuts pushed by President Bush in 2003 are set to expire at year's end. That means if a business owner is communication with employees, which is key for successful wellness programs.

"It's going to be very hard for the small broker to compete," Hudson said.