Renaissance Alliance Insurance Services (“Renaissance”), the Wellesley-based insurance agency alliance, has announced an investment of $30 million from Long Arc Capital (“Long Arc”) of New York. The Long Arc investment will fund Renaissance’s expansion outside the New England region and the development of enhanced services and technologies for Renaissance’s member agents to use in accelerating their growth and increasing their profitability.
First significant private investment in the agency aggregation business model
When contacted by Agency Checklists, Bruce Cochrane said the significance of this investment could not be overstated. “This is the first time in the country that this kind of significant investment, thirty million dollars, has been made by private investors in an insurance aggregation model,” adding, “It speaks to not only to the maturity of the model in the aggregate but also in terms of the efficacy that these folks feel about the Renaissance model going forward.”
Investment to accelerate Renaissance’s growth
Founded in 1999, Renaissance is a membership alliance for independent agencies specializing in property and casualty insurance. Currently, Renaissance has over eighty members in the New England region collectively selling $600 million in insurance premiums. Renaissance’s mission is to provide its members with higher commissions, access to more carriers, products, and markets, and a set of services that lead to higher growth and profitability.
In describing the impact of this investment, Bruce Cochrane, founder, and President/CEO said: “Long Arc’s significant investment in Renaissance will help to propel our growth, particularly in the technology arena. Long Arc and Renaissance have highly aligned values and a shared vision for the success of independent property and casualty insurance agencies. In an era of disruption, we view this as a strong endorsement of the long-term value proposition of Renaissance as a key player in the insurance industry.”
As part of the investor’s commitment, Kevin Callahan, an Advisory Partner of Long Arc has taken the position of Executive Chairman of Renaissance. Mr. Callahan has extensive experience in the insurance industry having most recently served on the operating committee of Marsh, the insurance brokerage and risk management subsidiary of Marsh & McLennan Companies, as the head of global sales.
Geographic expansion begins in New York and a southern state
Renaissance’s increase in equity capital will enable Renaissance to pursue growth in states where the company already operates as well as to enter into new regions while simultaneously expanding the services it offers its member agents.
When asked where it would first expand, Mr. Cochrane replied that Renaissance would first focus on a geographic expansion “contiguous to where we are now, and that means New York state.” Mr. Cochrane said Renaissance was now planning on moving into upper New York state, but also has another initiative going in a southern state. While he did not wish to specifically identify the state, he did say it was “a southern state, which we expect to have operational the first quarter of 2019.”
Long Arc chosen as an investor because of its commitment to developing the Renaissance platform
Mr. Cochrane also advised Agency Checklists that Renaissance had worked on finding the right investment partner for “the better part of four years.” After a number of discussions with potential investors over this almost four-year period, Renaissance focused on Long Arc because of its belief in the Renaissance business model as opposed to other potential investors who “only wanted to buy agencies.”
As Mr. Cochrane put it, “One of the reasons why we chose Long Arc is because they have a passion for our model. A couple of the principals there have been searching for a platform on which they could realize what they had perceived as a great opportunity here in the kind of model that Renaissance has created.”
Also, Mr. Cochrane emphasized that while the capital Long Arc has provided to enable Renaissance to develop its business model is important, equally important is the access to the human intellectual capital Long Arc’s investment provides for Renaissance to gather the kinds of expertise it needs for its territorial expansion and to enhance its data and technology services for its member agencies.
Mr. Cochrane will continue as Renaissance CEO going forward
When asked about Long Arc having acquired a majority interest in Renaissance, Mr. Cochrane responded, “I still maintain a very significant stake personally in the capital structure of the organization, and I will continue to be the chief executive officer of this company for a very long time.” However, Mr. Cochrane added, “This is like any other business model. Any successful entrepreneur across the country winds up at some point trading absolute control for the ability to be able to advance the model forward.”
Mr. Cochrane did state Renaissance is in the process of “bringing onboard right now the significant additional executive talent that can both propel us forward on our business plan and also provide that long-term perpetuation security that all of our stakeholders need to have.”
However, Mr. Cochrane also emphasized that he was not “going anywhere any time soon,” and added, “I plan on being around for another ten years or so.”
More about Bruce Cochrane and the Renaissance Alliance
2018 is shaping up to be a banner year for both Bruce Cochrane and the Renaissance Alliance. In addition to the announcement of Long Arc’s significant investment in RAIS, only a couple of weeks ago Agency Checklists reported on the Insurance Library Association of Boston’s announcement that they had selected Mr. Cochrane as the 2018 Insurance Professional of the Year.
As luck would have it, just prior to both these announcements, Agency Checklists had the opportunity to interview Mr. Cochrane about his long career within the Massachusetts insurance industry. For those who are interested in learning more about both Mr. Cochrane and the Renaissance Alliance, here is a link to our May 8, 2018 interview entitled, “Renaissance Man: Renaissance Alliance’s Bruce Cochrane & His Career In the Massachusetts Insurance Industry.“