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Insurance remains a core competency for BB&T Corp.
Already the nation's second-largest bank-owned insurance brokerage and sixth-largest broker of U.S. business under any kind of ownership, BB&T Insurance Services Inc. announced that it would pay $570 million in cash to acquire the life and P&C divisions of Crump Group Inc. from J.C. Flowers & Co. LLC. Despite a decades-long track record of buying brokers and agencies, the acquisition is easily the largest that BB&T has done in the space, marking a "transformational opportunity," as BB&T Insurance Services Chairman and CEO Wade Reece put it in a press release.
BB&T stated in its 2010 annual report on Form 10-K that it had closed 80 acquisitions of insurance brokers and agencies during the previous 15 years, but its recent activity had fallen well short of the average of 5.3 deals per year those statistics would imply. During the 32-month period from January 2009 through August 2011, for instance, BB&T announced the purchase of only two insurance brokers and agencies. But the bank has been more active since then, announcing the acquisitions of Liberty Benefit Insurance Services Inc. and Atlantic Risk Management Corp. in September 2011 and the purchase of F.B.P. Insurance Services Inc. in November 2011. None of those transactions offered even a hint of what the company had on the horizon, however.
San Jose, Calif.-based Liberty and Irvine and San Ramon, Calif.-based F.B.P., which does business as Precept Group, focus on employee benefits, and BB&T intended those acquisitions to help it align its strategy in that area with anticipated health care reforms. Columbia, Md.-based Atlantic Risk is a broker focused on both commercial P&C and employee benefits business. BB&T did not disclose the terms or the financial impact of the three transactions, but...