North Bay Business Journal

Monday, December 30, 2013, 7:00 am

SSM insurance brokerage expands to Petaluma

Is a response to growth; will consolidate offices from Novato


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    PETALUMA — The SSM Group, a Novato-based employee benefits insurance brokerage, will relocate its headquarters into 10,000 square feet at 1 Willowbrook Court in Petaluma after significantly growing its book of business.

    The brokerage, a division of United Benefits Advisors, will consolidate two current offices in Novato on Redwood Boulevard into the new space in Petaluma, bringing along 27 employees while more than doubling its physical space.

    The SSM Group, headed by longtime North Bay employee benefits brokers Keith McNeil and Jordan Shields, is moving in response to continued growth in top-line revenue, which has grown by approximately 40 percent over the year, according to the brokers.

    “It’s definitely growth,” Mr. Shields said of the move. “It’s logistical and building for the future.”

    The SSM Group is the fourth biggest employee benefits brokerage in the North Bay, with $65 million in premium volume in 2012 and commission income of $3.8 million, according to the Business Journal’s Book of Lists. That’s up from $60 million and $3.4 million in the same categories in 2011, and growth has continued through 2013.

    The expansion for SSM Group has come primarily in the form of affiliations with independent insurance agencies, with whom SSM often contracts with to take on back-end administration functions — a novel approach that capitalizes on increased consolidation in the professional services sector but doesn’t require outright acquisition.

    “We’ve been targeting smaller offices,” Mr. Shields said. “Here and there we’ll pick up a sales person. All the business goes through the SSM name.”

    Mr. McNeil said The SSM Group has partnered with four agencies across California, with another possible affiliation currently in the works going into 2014.

    The SSM Group also recently purchased the employee benefits book of business from Brody, Walsh & Brody, an independent agency based in San Francisco.

    “Part of the reason for the expansion is we have taken on the administrative duties for several agencies.  We’re not just expanding our basic brokerage services, but also expanding by affiliation,” Mr. McNeil said.

    The North Bay has seen its share of consolidation with insurance brokerages over the past few years, much of it spurred by the Affordable Care Act and a challenging business environment for small firms. In November, The Carlyle Group, a Washington, D.C.-based asset management firm, acquired a majority stake EPIC Insurance Brokers, which has a sizable Petaluma branch.

    Both Mr. McNeil and Mr. Shields pointed to that transaction as a more traditional outcome of the consolidating marketplace, while noting that a smaller agency could opt for affiliation over acquisition if they prefer.

    “Ours is more of collaboration,” Mr. McNeil said. “We may buy their book eventually. Not everyone wants to be bought.”

    “It gives them an exit strategy,” Mr. Shields added.

    The larger space in Petaluma will be able to accommodate potential brokers who opt to affiliate with the group, Mr. McNeil and Mr. Shields said. The move will be completed in March.

    The SSM Group will continue to target affiliations, particularly in the North Bay, where there’s seemingly fertile ground — there’s at least 19 employee benefits agencies across Marin, Sonoma and Napa counties, and about half are independents that could be potential affiliate or acquisitions.

    “Our obvious target is the North Bay,” Mr. McNeil said.

    EPIC Insurance Brokers similarly said it would look for acquisitions throughout the region after The Carlyle Group transaction.  Other notable acquisitions include Santa Rosa-based Vantreo Insurance Brokerage acquiring Hodges Insurance Services and national carrier Brown & Brown acqurining Sitzmann Morris & Lavis Insurance Agency, which has a sizable presence in the North Bay with $29.2 million in 2012 premium volume.

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