04 Mar, 2024
1 min read

Too big to specialize? The challenges of mid-sized brokers

Too big to specialize? The challenges of mid-sized brokers | Insurance Business Canada

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Breaking down two big difficulties

Too big to specialize?  The challenges of mid-sized brokers

Mergers & Acquisitions

By Gia Snape

Amid the rapid pace of mergers and acquisitions (M&As) in the industry, are insurance brokers that are too big to specialize, but not big enough to keep up with large consolidators, at a disadvantage?

Brokerages need significant investments to grow and scale, and some mid-sized firms may feel greater pressure to sell to unlock more resources.

“I think we all see the pressures in the industry,” said Nicholas Rawluk, president and CEO of ONE Insurance. “There’s a bifurcation going on where the big ones are getting bigger, and the small ones are going to become more specialized. As a mid-tier brokerage, it’s important that we try and choose our path.”

“We’re maybe a little too big [to specialize]so we need to decide which way we’re going to go within the market,” he told the Insurance Business about the motivation behind the merger.

With around 100 employees and 12 branches, ONE Insurance needs “a little bit more scale” to continue investing in its people and technology.

“If we’re going to compete in that broader sense of having a full range of services, we need to be able to make the investment in technology and in our people to stay relevant,” the CEO said. “The smaller you are, the harder it is to make that big investment. With a little bit more scale, we’re able to ensure that we’re staying competitive on all fronts.”

According to one industry analyst, mid-sized brokerage owners don’t necessarily feel more pressure to consolidate or sell, but the challenges of owning and managing a business in general are

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