Greg Williams was looking for a company that could move global insurance brokerage Acrisure LLC into the world of artificial intelligence.
He found the right one in tech entrepreneur Thomas Tull and his AI company, Pittsburgh-based Tulco LLC.
After a mutual investor in both companies introduced Williams and Tull, the two met in Pittsburgh in early 2019. They quickly found common ground and soon formed a joint venture that ultimately led to Acrisure buying Tulco’s insurance practice. The all-stock transaction, valued at $400 million, closed July 29, 2020, providing the Grand Rapids-based Acrisure the artificial intelligence and machine-learning technology that Williams sought.
“That transaction singularly transforms every facet of our business,” said Williams, Acrisure’s co-founder, president and CEO.
Acrisure’s acquisition of Tulco’s insurance practice was named a winner in the 2021 MiBiz M&A Deals of the Year Awards in the professional services category.
Williams and Tull decided initially to “test the waters” through a joint venture, known as Altway Insurance, that narrowly focused on life insurance and other individual benefits. The joint venture validated the role of AI and a digital platform in the insurance industry, as Altway Insurance generated sales growth of 10 percent or more a week for 24 straight weeks during the COVID-19 pandemic, Williams said.
The joint venture’s success led to last year’s acquisition. Tulco’s insurance practice became Acrisure Technology Group, the Austin, Texas-based AI division led by Tull, who is a significant minority shareholder in Acrisure.
“After almost half a year of 10 percent growth per week, I said to Tom, ‘We’ve kind of proven the case. This was a success we could only dream about. We really need to then take this AI capability and this AI talent and apply it to and deploy it across all Acrisure products,’” Williams said.
The AI and robotic-processing ability that the acquisition gave Acrisure now gets used in back-office administration and sales and marketing functions, he said.
In the back office, robotic processing saves about 1,800 hours of work a week and improves the productivity and efficiency of Acrisure staff, Williams said. The technology has not displaced staff at the fast-growing company, which recorded 2020 revenue of about $2.1 billion, more than three times the $650 million of 2017.
“We’re still going to continue to hire, still going to continue to grow. As we’re bringing more work into the business and into the home office (in Grand Rapids), we’re just doing that with the help of robotic processing,” Williams said.
For clients, Acrisure uses AI in modeling to gain better insights on their risk, “bringing opportunities and identifying opportunities for our sales force they wouldn’t otherwise have,” and creating a competitive advantage, he said.
“It gives us that insight to where that risk profile exists to where we know we can help them,” Williams said. “It really is identifying, in some cases, the unmet needs or the unexpressed needs of our clients that we should be talking to them about that we haven’t. The insights gained from this are vast and significant in terms of how we can help clients, while at the same time grow our business.”
One of the world’s largest insurance brokerages, Acrisure has nearly 600 offices worldwide and for years has grown rapidly through an aggressive acquisition strategy. The company last year made 110 acquisitions and another 30 have closed or are under letter of intent in 2021.
Acrisure put together the Tulco deal while maintaining a torrent of acquisitions in 2020. The company for years has by far been the largest acquirer of independent insurance agencies in the U.S, closing on 464 acquisitions from 2016 to 2020, according to Optis Partners LLC, a Chicago-based firm that tracks M&A in the insurance industry.
Key to the Tulco deal, just as with buying an agency, was following long-held best practices.
“Philosophically, we’ve always placed at the top of the list the party that we’re doing a deal with, the integrity of the people, the cultural fit and the things that we emphasize,” Williams said. “All of those things are really relevant to our standard, everyday M&A and that was also relevant here.”