Opportunities for “challenger broker class” to stand out amid broker consolidation.
It’s been a busy year for Protecdiv, the first tier-one minority-led insurance and reinsurance broker in the US. Since its launch in January 2020, the firm has partnered up with key players in the industry, namely global specialist reinsurance broker BMS Group and national independent broker Cobbs Allen, both of which will help Protecdiv expand its footprint across various industries.
While the coronavirus pandemic has, in the meantime, introduced challenges during the first year of business, Protecdiv’s founder and CEO also sees opportunities in this climate.
“We’re a digital brokerage, so the shift to work-from-home was not much of a shift for us since we were built for that – we have seven employees in six different states now and that didn’t bother us at all,” said Kael Coleman (pictured), Protecdiv founder and CEO, adding that, at the same time, “COVID-19 and the protests around equity, and also other things in the market like the continued consolidation of brokers, are causing risk managers to take another look at their insurance and reinsurance programs and say, ‘Well, there’s a lot going on and a lot that we should be thinking about – should we be looking at things differently and should we be hearing from different voices?’”
Those different voices can include other brokers, like Protecdiv, who can help out on an insurance program and ensure that clients are getting the best advice and the best access to technology. As a result, while dealing with COVID-19 was clearly not in the plan for the Protecdiv team back in January, its CEO does think that the firm will benefit from the changes that the pandemic will introduce into the industry.
As it seeks to offer its expertise to clients looking for another opinion, the team-up with BMS Group and Cobbs Allen, as well as CAC Specialty, which the latter launched and took a minority stake in back in August 2019, will help Protecdiv gain a foothold in some important markets. The Cobbs Allen-CAC Specialty team-up specifically will help to create efficiencies and broaden the footprint of all three brokerage firms in the auto, financial, energy, construction, public entity, and reinsurance markets. Cobbs Allen and CAC Specialty already have 15 offices across the US, with the former specializing in commercial insurance, employee benefits, personal insurance, and alternative risk financing.
This strategic partnership came about after Protecdiv leadership got to know Cobbs Allen president Bruce Denson and other leads at the brokerage in September 2019, and developed a relationship with the team. Coleman explained that he was looking for a partner that could assist in the expansion of Protecdiv’s reach in terms of expertise across industries and lines of business, but also one that could bring a strong servicing capability. Amid the consolidation in the brokerage marketplace, this strategic partnership model offers several benefits.
“There are a couple of very, very large firms and then there’s maybe another tier down, and then there’s everybody else,” said Coleman. “With the kinds of business that we target, which are Fortune 2000-type risks, public entities, and [clients] on the reinsurance side, and especially with the Aon-Willis merger [that is] bordering on a duopoly, one of the challenges that we face, and we’re happy to face it, is that there is a view by many that the broking world is Aon and Marsh.”
In turn, Protecdiv has to be able to answer the question of, how can you match a brokerage that has 75,000 people on staff? However, Coleman sees an opening for what he calls a “challenger broker class” to find new ways to provide better-fitting solutions for clients.
“The way we match that and the way we exceed that is through things like this partnership with Cobbs Allen and CAC Specialty, where we can say, ‘Listen, we’re going to know you better so that we can deliver solutions that fit you better, that are thinking about you now and you tomorrow, and are not dependent on having 75,000 people,” he explained.