2023 brokerage revenue: $3.89B
Percent increase: 7.4%
Acrisure LLC eased its traditionally torrid acquisition pace in 2023, focusing instead on its reorganization into a regional structure and a brand strategy that will have all offices operating under the corporate name.
Much of the work to create 11 regional platforms and eight specialty programs is done, said Gregory L. Williams, CEO of the Grand Rapids, Michigan-based brokerage. “The brand launchings have all been completed” in North America, and “we’ll be done with the system conversions in 2024,” he said.
“Globally, we’ll be operating under one flag next year,” Mr. Williams said.
The brokerage completed 47 deals last year, down from 116 in 2022. As of mid-June this year, Acrisure had closed on or signed letters of intent on 30 acquisitions.
“That was intentional,” Mr. Williams said of the shift to focus less on acquisitions and more on reorganizing. “That might be the same posture next year, but it’s too early to say,” he added, with expectations that more deals will be made outside North America than within.
Acrisure’s appetite for acquisitions is expected to remain “diminished” in the near future, according to Joseph Marinucci, director at S&P Global Ratings, a unit of S&P Global Inc., in Princeton, New Jersey. “Much more tuck-in oriented,” he said of the type of deals the brokerage will eye as it prioritizes its work on reorganizing.
The brokerage’s 2023 gross revenue rose 8.5% to $3.96 billion. Brokerage revenue climbed 7.4% to $3.89 billion, significantly down from the acquisition-driven growth rates of the past several years. The company slipped one spot to No. 7 in Business Insurance’s ranking of the world’s largest brokerages.
Organic growth slipped to 4% last year, down from 10% in 2022. But that number is expected to surge, Mr. Williams said. “It’s likely going to be a record organic growth year,” he said of 2024.
Last year’s organic growth was diluted by the performance of Acrisure’s mortgage origination and title business, which is sensitive to economic conditions, said Julie Herman, director at S&P Global Ratings in New York. Excluding that business, organic growth reached 9%, she said.
“But that drag has diminished materially,” Ms. Herman said. “We’re expecting organic growth of around 10% for 2024.”
Acrisure is poised to benefit from last year’s work to reshape the company, said Evelyn Ocas Salazar, assistant vice president-analyst at Moody’s Investor Service Inc. in New York. She expects the brokerage to focus on “crystallizing the synergies they’ve gained with that consolidation. … Overall, they are well-positioned.”
In June, Acrisure announced plans to offer $1.38 billion in secured senior notes and $500 million in unsecured notes that will be used to refinance around $2 billion in debt and repay the $825 million balance on a revolving credit facility.
“We’re focusing on de-levering the company,” Mr. Williams said. Surging organic growth “allows us to accelerate our de-levering ambitions and objectives. At the end of the day, we will be less of a consumer of debt than we have in the past,” he said.
Less borrowing for future acquisitions will help Acrisure reduce debt, Mr. Marinucci said. “But that’s going forward. Right now, there’s quite a bit of leverage in our view,” he said.
Speculation continues as to whether Acrisure will hold an initial public offering. While Mr. Williams said that it won’t happen this year, an IPO is likely “sooner as opposed to later.”
Acrisure’s implementation of artificial intelligence is “never-ending,” Mr. Williams said. “What we have in terms of capability today is significantly different from what we had at the beginning of this year.”
“They have direct access to the customer who is making decisions,” Ms. Ocas Salazar said of the brokerage’s small-market clients, and “their AI capabilities could give them a little edge.”
Acrisure sales professionals who use Auris, the company’s technology platform, experience business growth of 340% more than those who aren’t yet using it, Mr. Williams said.
“When Auris makes predictions around who’s likely to buy what products and services,” he added, they generally prove to be accurate.
