That’s 72 acquisitions last year for the Chicago-based insurance brokerage and financial services giant. Not five, 10, 20 or even 50, but 72.
Those acquisitions have varied in size, and scope, including many brokerages in the P/C insurance space but also life and health insurance, and more recently in areas such as investment and wealth management. M&A activity for the company continues at a robust pace – part of a strategy in place since private equity firm Hellman & Friedman (H&F) acquired Hub in 2013.
Hub International chief technology officer Seth McCallister (pictured) is a witness to that explosive growth, since joining the company initially as chief information security officer back in May 2016 (he became CTO in May 2019). In his current role, McCallister must help absorb the new guys into Hub’s operations and drive the company’s long-term digital strategy.
“M&A is one of our primary engines,” McCallister explained. “We have a strong organic growth combined with our M&A and that’s what we view as our secret sauce.”
The pace is robust, but worth it, he added.
“Growing at the pace of acquisitions in our company is always something that is a challenge, [but] we’re in a good position,” McCallister said. “That’s a good problem to have, right?”
That leaves McCallister and his team balancing where it applies resources so both “bigger flagship programs” and post-M&A support get the proper attention.
The challenge, he said, is balancing some of the custom technology the acquisitions bring to the table with some of the standardization required by a larger company.
As Hub as grown through acquisition, it has remained scrappy, McCallister said, choosing to remain relatively decentralized. This approach has worked well.
“From a technology aspect, it’s balancing where we standardize versus where we do custom things that allow us to move quicker,” he said.
Innovation and digitization
Hub’s acquisitions left it with a formidable reach. The company now employs 16,000 employees and growing in the US, Canada and Puerto Rico, up from about 4,000 in 2016. Driving this, in part, has been an acquisition rate averaging between 55 and 72 M&A deals annually in recent years, McCallister said. Hub’s 2022 acquisitions should be similar.
While Hub has grown through acquisitions (it now generates north of $3 billion in annual revenue), it has also focused heavily on innovation and digitization to fuel organic growth. McCallister views his job as helping to propel that broader technology strategy.
“As we look forward into our digital transformation journey … I’m responsible for the technology side of that, behind everything from the customer development teams and digital cloud operations and architecture … and then our technology arm as well,” he explained.
Part of his work taps into the M&A side, such as helping Hub absorb its acquisition of Insureon Holdings and its affiliates. In March, Hub announced the M&A deal, something it pursued in partnership with the insurtech Bold Penguin. Hub got the Insureon digital insurance agency and brand, while Bold Penguin snatched up the Insureon technology platform.
There’s also the innovation side, such as Hub’s June 2022 launch of VIU by HUB, a new digital platform designed to help consumers pursue home, auto and other transactional personal insurance needs. McCallister is also CTO of VIU by HUB, which remains part of Hub International but was built like a separate startup, McCallister said.
McCallister helped develop the platform with Bryan Davis, executive vice president and head of personal lines strategy & business development at Hub. The process to launch it took just over eight months from the initial idea, McCallister said.
“This was one of my biggest accomplishments in my career and since I’ve been at Hub,” McCallister said. “We made a concerted effort to reinvent this, to run it like a startup internally, to dedicate the right resources, and to move from a Waterfall to Agile methodology of how we develop things.”
The Waterfall process requires deliberate stages for project conception, design and then implementation. Agile development involves completing work in short increments, or sprints, and often helps finish projects more quickly.
According to McCallister, the VIU project started with a “really strong business/technology partnership” and evolved into a separate entity within Hub in an organic way.
“Having to do that in eight months was unbelievable,” McCallister said. “We had to move like an insurtech [and] build an all-new technology stack that wasn’t going to be shoehorned into legacy tech so we could come out with more features.”
Broker, but with more tech
McCallister said that, longer term, Hub wants to remain a broker but use technology as it is deployed appropriately.
“It’s really the right application of technology for the right things, but I’d say longer-term more tactical technology,” McCallister said. He and the company will also focus on investing in its “data ecosystem” because data is at the center of things that Hub builds.
McCallister, as CTO, also helps enact the company’s API-first technology, which helps clients and customers to connect to its digital platforms and systems more easily.
It “allows a more frictionless way to communicate with us that’s systemically been an issue with the insurance industry,” McCallister said.
In addition, the company will track and nurture its API capability, as the service “becomes more and more commoditized,” McCallister said.
Change is good
McCallister said he has been a technologist for many years and loves how technology is never the same for long.
“I like how it changes all the time. I like how every day is a bit new,” McCallister said. “I like the grind of it, and I like still being very technical along with the executive business side. That’s a very powerful combination.”