Digital Insurance Inc., an employee benefits agency in Atlanta, finished 2010 with a recording-breaking $17 million in acquisitions, which strengthens its nationwide growth plan to partner with major insurance agencies that have a large local market presence. This year, Digital plans to continue this route and anticipates a 50 percent growth.
"While Digital has access to capital to grow aggressively, we are being selective about our expansion targets," says Mike Sullivan, executive vice president and chief marketing officer.
When looking for potential acquisitions, Digital is searching for firms that have a similar focus on the small- and medium-size business market, a progressive outlook regarding health care reform and share a cultural fit with the organization.
"We bring local agencies a set of proprietary solutions, operational focus and scale, expanded relevance with carriers, and a sophisticated technology platform that enables us to better serve our clients - all essential to future success," Sullivan says. "By aligning with respected agencies, we are able to localize our business, gaining relationships and deep local market knowledge that takes years to otherwise attain."
Digital is pursuing several acquisition models during 2011, including agency, property and casualty, and block acquisitions as well as partnerships with a shared-commission agreement.
"There is a growing acknowledgement among agencies that our business is at an inflexion point and a go-it-alone strategy will challenge many small firms downstream," says Sullivan. "We have been able to thrive as a company by being different and embracing change. Our goal now is to bring capital and capability to the SMB market in a way that helps transform the marketplace."
In 2011, Digital is eyeing 12 states for potential growth, which include Arizona, California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New York, New Jersey, Ohio, Pennsylvania and Texas.
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