SIAA began in 1983 in New Hampshire with the creation of the SAN Group
Odyssey Partners, a middle-market private equity firm, has acquired the New Hampshire-based Strategic Insurance Agency Alliance for an undisclosed sum. The Strategic Insurance Agency Alliance, better known to our readers as SIAA, is a national alliance of independent insurance agencies begun by Jim Masiello in 1995. According to the terms of the transaction, Mr. Masiello will retire from the organization upon completion of the acquisition.
In commenting on the future of his organization, SIAA’s chairman and founder, Jim Masiello said, “We’ve been exploring our perpetuation options for some time now, with special consideration to the ongoing success of our master agencies and member agencies across the country. This transaction provides for the continued success of our model and all who participate in it.”
Mr. Masiello’s son, Matt Masiello, will continue to lead the organization as CEO, along with the rest of the SIAA management team. In commenting on the announcement, Matt Masiello said, “This transaction sets the stage to take our business to the next level based on our proven model. We’ve had great success as the original and largest network of independent insurance agencies in the country, and now we will have the resources to move forward more decisively in M&A, technology, and investing in other growth initiatives.”
“There’s no desire to disrupt our proven methods for success, ” added Matt Masiello. “We exist to help independent agents grow and thrive. The challenge is to identify what we can do better and to provide accelerators to expand upon our core competencies.”
According to SIAA, at year-end 2020, SIAA reached approximately $9.6 billion of total in-force premium, up from $8.9 billion at YE 2019. It also welcomed 527 new member agencies last year, the second highest number in the history of the company.
The concept of SIAA began with the creation of the NH-based SAN Group
Headquartered in Hampton, NH, SIAA was formally incorporated in 1993 and modeled after Mr. Masiello’s original master agency the SAN Group. The original idea for the SAN Group arose back in 1983 during a particularly challenging market for independent insurance agencies. As Mr. Masiello explained in the company’s book The Story of SIAA, “Those times were very tough. We were in a hard market and our location limited our potential to grow. It became clear to me we had to grow outside of Keene, which was quite isolated in terms of population.”
Uninterested in acquiring other agencies, Mr. Masiello focused instead on partnering with other independent insurance agents “to create one master agency.” Thus, the SAN Group was born. After the signing of a group of like-minded independent agents, the SAN Group was appointed by its first “Strategic Partner Company.” As more agencies from around New England expressed interest in joining the SAN Group, it quickly evolved from a small local alliance into a regional one.
Today, the SAN Group still operates in the Northeast with more than 370 members spanning eight states and more than $910 million in total member premium.
In 1993, Mr. Masiello decided to replicate the success of the SAN Group nationally, with the creation of SIAA. In 1995, SIAA was officially incorporated. As of 2019, SIAA is the nation’s largest agency alliance with approximately 13% of all independent insurance agencies throughout the United States being a signed member of SIAA. In 2020, the company projected the number of signed agencies to exceed 450 with a total premium volume surpassing $9.5 billion. The following is a breakdown of 2019 Network Growth from the company’s official statistics:
2019 Network Growth YTD
In total, as of 2019, SIAA states that it has approximately 4,237 active member agencies.
A private equity firm focused on “transforming middle-market companies”
Founded more than 20 years ago, Odyssey Partners is a private equity firm targeting “middle-market companies” across the nation with annual EBITDA of between $20-$100 million.. Having raised over $8.2 billion in private equity capital since its inception, the company has invested in more than 50 platform companies and has successfully completed an additional 200 add-on acquisitions.
On its website, the company says it is currently investing out of its “sixth fund”, a $3.25 billion vehicle raised in 2002. The company says it considers itself “business owners” rather than “financial investors.” While the company has made other investments in the insurance sector, it does not appear to be the firm’s main focus. On its website, it claims that it applies a “macro-thematic approach to identifying attractive areas of investment within two broad sectors: industrial and business services.”
In commenting on its acquisition of SIAA, Jeff Moffett, Managing Principal at Odyssey, stated, “We are excited to partner with Matt and his team to invest in and accelerate the growth of SIAA and the independent agent channel. Building on the decades of success Jim, Matt and the SIAA team have achieved, we share a common vision for the potential of SIAA and its alliance partners.”
According to the official release announcing the acquisition, Goldman Sachs & Co., LLC served as exclusive financial advisor to SIAA on the sale while Odyssey was advised by Piper Sandler.
This is the second New England-based agency alliance to be acquired by a private equity firm. On January 1, 2021, Renaissance Alliance co-founders Bruce and Janet Cochrane announced their retirement from the aggregator they founded in the late 1990s.