Acquisition of Wholesaler Adds Services for Producers with U.S., Canadian Cross-Border Clients
Hub International Limited today announced the acquisition of Cross Border Underwriting Services Inc. (CBUS), a Toronto-based wholesale insurance brokerage. CBUS will become part of The Wholesale Insurance Group Inc., a subsidiary of The Hub Group (Ontario) Inc., the company's Toronto-based hub.
The stock of CBUS, whose annual revenue is approximately US$300,000 (Cdn$400,000), was purchased from KRG Insurance Brokers Inc. for an undisclosed amount of cash. CBUS provides coverage placement and marketing solutions for retail insurance producers whose Canadian clients have operations in the United States and those whose U.S. clients have operations in Canada.
The Hub Group (Ontario) Inc. is one of 11 regional "hubs" that make up Hub International Limited, one of the largest insurance brokerages in North America. Hub International's growth strategy includes the acquisition of large entrepreneurial brokerages that service primarily middle market clients, and the expansion of these regional hubs through fold-in acquisitions of smaller, local firms. Since January 1, 2003 Hub has made five fold-in acquisitions, including CBUS.
In discussing the transaction, Martin P. Hughes, Hub Chairman and Chief Executive Officer, said CBUS would add significant service capabilities for all of the Company's hubs.
"The enormous amount of commerce between the United States and Canada affords many middle-market companies in both countries opportunities to do cross-border business," Hughes said. "But there are some country-specific variations in the way coverage is arranged, and CBUS will strengthen our ability to help our retail producers bridge those differences for their clients."
Hub International has established strong access to insurance markets in the United States and Canada, enabling its customers to benefit from these resources. As new brokerages are added to the organization, producers and clients gain the same advantages that have helped Hub International become a leading competitor in its markets.
Headquartered in Chicago, IL, Hub International is a leading North American insurance brokerage that has grown rapidly since its formation in 1998 through mergers, acquisitions and organic growth. It provides a broad array of property and casualty, life and health, employee benefits, investment and risk management products and services through offices located in the United States and Canada. Hub International's strategy is to expand its market share in the highly fragmented insurance brokerage industry by acquiring quality firms in key geographic regions that focus on servicing middle-market commercial businesses. In addition, Hub plans to leverage its decentralized approach, differentiate its service and capitalize on its scale to provide broader product offerings to its clients through multiple distribution channels. Hub International currently has eleven large "hub" brokerages that have significant market presence in their geographic regions in the U.S. and Canada. Each hub provides insurance brokerage services and manages the various other Hub International offices in its territory. The hub brokerages are responsible for growth through sales, service and fold-in acquisitions. The hub offices report to the head office which, in addition to monitoring the activity of each hub, retains responsibility for identifying and acquiring additional hub brokerages.
This press release may contain forward-looking statements which reflect our current views with respect to future events and financial performance. These forward-looking statements relate, among other things, to our plans and objectives for future operations and are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to, risks associated with implementing our business strategies, identifying and consummating acquisitions, integrating acquired brokerages, attaining greater market share, developing and implementing effective information technology systems, recruiting and retaining qualified employees, fluctuations in the premiums charged by insurance companies with corresponding fluctuations in our premium-based revenue, any loss of services of key executives, industry consolidation, increased competition in the industry, fluctuations in the demand for insurance products and the passage of new legislation subjecting our business to regulation in jurisdictions where we operate. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Additional information regarding these risks and other factors that could cause Hub International's actual results to differ materially from our expectations is contained in the company's filings with the Securities and Exchange Commission. Except as otherwise required by federal securities laws, Hub International undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.