Yankee Insurance recently acquired its neighbor in Plymouth, the Butler & Breslin agency. This is the first acquisition for Yankee Insurance, but as owner Michael Butts says, hopefully not the last.
Why acquire an agency now?
We decided to buy this agency because we wanted to increase our presence in Plymouth. My sister Dina and I grew up in Plymouth, so it seemed to be a natural fit.
Who did you buy?
Butler & Breslin Insurance Agency, which was formerly known as the Butler Insurance Agency.
Why were they selling?
The owner already owned another agency and in any case, he was more of a producer and more on the commercial lines side of things, whereas this agency was an exclusive representative producer. Anyways, the former owner was buying another agency and so wanted to let go of this one.
How did you finance the purchase?
It was not a structured deal; we got assistance from the bank for a cash deal, bank funds. Ultimately, obtaining the financing is the most difficult thing in my opinion, if you don’t know the business it can be difficult.
Oak Street Funding is really formal; one has to have ratios in place and the like. Our project was not a big enough deal for them, our deal was small all-around and what they were looking for just did not fit. I also talked to Insurebanc and this would have been a fall back. Ultimately, however, a buddy of mine who runs an agency in Dedham suggested Kevin Joyce of S Bank in Weymouth. He used him a couple of years back and highly recommended him. He is kind of a local expert on acquisitions and he got the deal done.
How has the merging of the two offices been?
I was first approached about buying the agency in December 2011. We came back to the table in April or May and then finally closed the deal on July 18th. Part of the lag in time, was the lack of technology in the agency we were buying and in getting the reports to me. As a result of the acquisition, we have closed down the old Butler & Breslin office and merged everyone together. So far, there have not been too many complaints and we haven’t lost a customer from the move.
As for employees, none of the existing Butler & Breslin ones stayed on. The biggest challenge for me thus far, has been to hire two new CSR for the office. Buying the agency and servicing the customers have been alright and we are finally getting comfortable. Finding the right help has been more of the challenge.
Now that you have acquired your first agency, would you do it again?
Yes, this was our first but we are interested in buying more.
Being an old exclusive representative producer in an urban market, our auto book was running a loss ratio of 150% or even sometimes a 200% ratio. When we went voluntary we had to cut it out almost half, we had to clean out the book of business, so we know how to do it and we can do it well.
During this interview with Mr. Butts we got talking about the ins and out of running an agency and how his agency has embraced technology in both his Dorchester and Plymouth offices. Agency Checklists thought this would be a great way to restart our Agency Interviews for 2013 by inspiring other independent agents to embrace technology too. Read our latest Agency Interview with Michael Butts of Yankee Insurance here.