The company has perfected the new model: using financial power to build at scale to consolidate and perfect back-office distribution. With a near-relentless appetite for acquisition, Integrity has a network of approximately 500,000 agents and advisors who serve more than 11 million clients annually.
The growth of Integrity’s rockets is rocking the industry. Five years ago, the company acquired Neishloss & Fleming, a Pittsburgh-based company that distributes Medicare Advantage and Medicare supplemental insurance plans. Its agent network then numbered 120,000 agents, according to an Integrity press release.
Integrity isn’t the only marketing company to achieve scale. Although the companies deny being driven by competition, Simplicity Group and AmeriLife Group are also experiencing dramatic growth through acquisition activity.
The relentless growth of the Big Three is changing the distribution landscape, said Sheryl Moore, president and CEO of Moore Market Intelligence and Wink Inc..
“It’s hard to compete with an Integrity or Simplicity or an AmeriLife in terms of sales, and therefore annuity commission payments,” she said. “Because of this, I’ve seen friends talk to these companies when they wouldn’t have considered selling so soon. It just seems that for those who had planned to retire in five to seven years, I see more of them having discussions with these three companies than I would have anticipated.
The advantages of the ladder
Granted, not all agencies that sell to super-IMOs do so reluctantly. In fact, many are eager to receive interest and offers from big players. To understand why, you have to look at what it means to be an integrity “partner,” as Adams calls them.
In an era of growing regulatory obligations and segmented marketing audiences, combined with shrinking profit margins, agencies can use the help of back-office functions.
Integrity touts streamlined administrative functions through centralized areas, such as people and culture, technology and innovation, finance, legal and compliance, and “world-class” advertising and marketing. “. Additionally, Integrity offers its partners access to proprietary technology through its omnichannel insurtech platform.
“These comprehensive insurance and financial services offerings include valuable agent resources such as product development, quoting and enrollment systems, and customer relationship management software,” Integrity said on its website.
For a small agency like Richman Insurance Agency, an OMI based in Dallas, Texas, which joined Integrity in August, this kind of safety net can reduce or eliminate many potential headaches.
“Partnering with Integrity is a pure opportunity,” said Rob Richman, president of the agency, “to do things you never thought you could do on your own. And to do so with a great team of resources.
Adams balks at the perception of Integrity as a voracious acquirer of agencies. He mentions the May 2022 acquisition of Ritter Insurance Marketing, a mid-sized IMO specializing in Medicare Supplement and Medicare Advantage plans and based in Harrisburg, Pennsylvania.
“I never went to [Craig Ritter’s] office,” said Adams, who previously founded Legacy Safeguard, a final expense company. “I would probably get in the way. It’s really about how to support them, give them more technology, more support, more resources to grow faster and serve more people. So I think our model is very different from others, because we’re not trying to acquire a business to try to make it work.
Not in the plan
Integrity made its first acquisition in 2013, and to hear Adams tell it, the deal happened almost by accident.
“We never thought about acquiring a business,” he said. “It was never part of our plan. But an insurance company came to us, a very large insurance company, and said, ‘Hey, we have a former distributor who doesn’t have a succession plan. Would you like to acquire them? »
This was quickly followed by another similar offer, Adams recalled, and it quickly became clear that there was a gap in the distribution chain that needed to be filled.
In 2016, Integrity took a giant leap forward with a capital injection from private equity firm HGGC, the boutique co-founded by NFL Hall of Fame quarterback Steve Young. Young is now the CEO of Integrity.
The pace of Integrity’s acquisitions accelerated in 2022 as the company captured high-profile targets:
» Brokerage of ashes. Acquired in May, Ash Brokerage is one of the largest insurance brokerages in the United States, with more than 400 employees nationwide. In 2021, Ash Brokerage helped place over $2 billion in premiums, while underwriting $25 billion in face capital for American families and businesses.
Indiana-based Ash is a full-service brokerage firm providing life insurance, long-term care, disability, annuity and retirement solutions.
» PHP Agency. PHP, which stands for “People Helping People”, serves nearly half a million Americans nationwide by offering life insurance and annuity products through its team of more than 27,000 agents. . Based in Addison, Texas, PHP joined Integrity in July.
” Annex. Integrity secured one of its biggest deals to date with the late July acquisition of Annexus Group, a product design and distribution company with $45 billion in combined sales and partnerships with some of the biggest companies in the sector.
In 2022, Annexus expects to place about $7 billion in annuity premiums and $150 million in target life insurance premiums, the company said on its website. Annexus is one of the industry’s leading annuity innovators and markets itself as “America’s #1 independent retirement planning product design and distribution company.”
A public future?
In 2021, Integrity received a second injection of private equity, this time from Silver Lake. A leading technology investor, Silver Lake has taken a minority stake and a seat on the board of directors with its $1.2 billion investment.
Silver Lake’s investment was for Integrity technology platforms.
“Insurance and wealth management services are crucial components of the healthcare and financial markets – industries ripe for transformative innovation,” said Egon Durban, co-CEO of Silver Lake.
But the growing investment from private equity has many in the industry wondering if Integrity is destined to go public at some point.
Integrity became an employee-owned company in 2019 with the formation of the Employee Stock Ownership Plan and then paid a retroactive cash distribution of $50 million to Integrity’s 750 employees. Adams said there were no plans to disrupt the corporate structure.
“I don’t really want to take this company public,” he said. “It’s a company I founded that remains passionate about how we serve people better together. So our goal is to keep growing and to keep developing. And at this point, we have no desire or need to go public.