MGA Insurance goes into 2015 with a new corporate owner, among other changes. It has big expectations for growth.
An uptick in the housing market, especially in appreciation of homes, is good news to Lou Marinaccio, even though he's not in real estate.
Marinaccio, instead, runs MGA Insurance, a Lakewood Ranch-based firm that's a national leader in the niche market of selling insurance and benefits consulting services to independent insurance agents. MGA sells insurance plans and packages with features that include health, life, dental and professional liability to agents who work for firms like Aflac, Aetna and Great American Insurance.
And the housing market rebound, says Marinaccio, means more insurance agents are doing better, which, in turn, is better for MGA. Premiums at MGA have climbed more than 58% since 2011, to about $100 million. Premiums in 2014, adds Marinaccio, increased 27% over 2013. “Business is up,” says Marinaccio. “We find more people become increasingly very concerned about putting their financial life in order,” when there's a housing market rebound.
MGA, with 47 employees, made news in 2014 for more than its growth. A big highlight: Itasca, Ill.-based Arthur J. Gallagher & Co., a $3.1 billion international insurance brokerage and risk management services firm, acquired MGA in May. Financial terms of the deal, in which the MGA name will live on, under the “a division of Gallagher & Co.” tag, weren't released.
“We continue to look for new partners that will add to our specialty products and services capabilities, expand our geographic presence and fit well within our culture, and MGA has all of these qualities,” Gallagher & Co. Chairman, President and CEO J. Patrick Gallagher Jr. says in a May 27 release on the acquisition. “They are well-known for their personalized service and share the same entrepreneurial spirit and team-based sales culture as Gallagher.”
In addition to corporate culture and a strong presence in Florida, Marinaccio says Gallagher & Co. was attracted to MGA because of the smaller firm's technology capabilities. MGA, for example, has spent at least $3 million on software, hardware and intricate data-encrypted cyber security upgrades over the last five years.
The past 12 months also marked MGA's first full year in its new headquarters, a 32,000-square-foot, two-story complex it bought in east Manatee County in December 2012. The firm paid $2.86 million for the building, the former regional office for homebuilder Taylor Woodrow. It spent another $1.5 million on an extensive renovation of the second floor, where its 18,000-square-foot office is located. The ground floor is leased out, where tenants include doctors' offices and the Lakewood Ranch Business Alliance.
The investment in the headquarters and in the firm's technology is one way Marinaccio backs up his confidence in the economy, and the insurance industry. “We are very bullish on Southwest Florida,” says Marinaccio, “and the current economic environment.”
Marinaccio adds that like the housing industry rebound, a good economy, by definition, will lead to more business for MGA. “We protect people against risk,” Marinaccio says. “As more people expand their risk, we benefit from that.”