© Darrell Cole – Cumberlandnewsnow.com
Amherst Rotarian Ian McCarthy speaks to Michael Stack of Archway Insurance. Stack spoke to members of the Amherst Rotary Club about changes in the insurance industry and how his company has adapted
Speaking to members of the Amherst Rotary Club on Monday, Michael Stack said the industry is going through a significant period of consolidation.
“The big are getting much bigger and smaller mom and pop shops are struggling to keep pace,” Stack said. “Brokers’ main competition used to be other brokerages. Now we are competing against our own companies like Grey Power (Intact), Johnson’s (RSA) and banks like RBC and TD. All these competitors are multi-billion-dollar businesses and formidable competition, to say the least.”
Along with competing for sales on a policy for policy basis, Stack said, these new competitors are purchasing brokerages and driving up brokerage values in the process.
“This would be fine if you’re a seller, but for us buyers, this presents some fairly large multiples and potential financing issues,” he told Rotarians.
Stack said Archway Insurance recognized these trends early on and has been acquiring agencies over the last decade at a rapid pace with 15 acquisitions in Nova Scotia and New Brunswick forming nine offices.
“From Yarmouth on the south shore of Nova Scotia to Miramichi in central New Brunswick, Archway employs 70 and has become one of the largest independent brokerages in Atlantic Canada, based right here in Amherst,” Stack said.