The merger this month of two of the state’s largest independent insurance firms shows how demographics and technology are changing a business that’s long been dominated by small entrepreneurs.
North Risk Partners officially merged with Bearence Management Group on May 1, forming a brokerage with more than $50 million in revenue and 21 offices, mainly in Minnesota but also in Iowa and Nebraska. Terms weren’t disclosed.
The combined company will keep the North Risk name, have 27 partners and be led by North Risk chief executive Chris Meidt, a former Walmart Stores Inc. executive known in Minnesota as a football standout who coached at St. Olaf College and with the Washington Redskins.
Bearence managing partners Dan Seemuth and Stan Hamann retained their equity and join Meidt to form the executive team in the combined firm. Both Bearence executives will also continue their operational duties, with Seemuth overseeing the Des Moines and Omaha locations and Hamann in charge in Mendota Heights.
“The structure is very flat,” Meidt said in an interview last week. “We are an aligned organization and geographically clear. The vast majority of our team works directly on insurance.”
About 85 percent of the combined company’s revenue comes from the sale of commercial insurance to businesses, with the rest to consumers.
Both North Risk and Bearence were majority-owned by BroadStreet Partners, a Columbus, Ohio, firm that invests in, but does not operate, independent insurance agencies across the country. Such agencies are typically run by their entrepreneurial founders, some of whom are nearing retirement and looking for an exit.
BroadStreet owns 20 insurance firms across the United States but leaves control to local executives. It mainly provides legal, accounting and other services and, a handful of times a year, brings leaders of the firms together to discuss ideas and trends.
Because of their BroadStreet affiliation, executives at NorthRisk and Bearence firms had been considering a merger for some time. They began to work on it formally in March, Meidt said.
The combination is the largest of a series of deals that began in 2012 when three companies — Apollo Insurance of St. Cloud, C.O. Brown Insurance of Rochester and Johnson McCann in St. Paul — merged to form NorthRisk.
Meidt joined in 2014 and NorthRisk has since made nine acquisitions, including some of agencies where the founder was retiring and others that needed financial help to grow.
“Carriers are putting more and more pressure on productivity that smaller agencies can’t live up to,” Meidt said. He added, “Our core model is people who want to grow and are looking for someone who will invest in them and take their agency to another level.”
The company expects to announce more acquisitions this summer. In addition to Mendota Heights, North Risk has a metro area office in Little Canada.