CRC’s Kessler on M&A: “We’re ready to get back into that game, big time”

The recently appointed CEO of CRC Group's wholesale division envisions M&A bouncing back at the firm after a pause on wholesale acquisitions over the last year.

“We see opportunities on the employee benefits side pretty significantly; we do see additional opportunities in the underwriting business – the Starwind and AmRisc business – we see a lot of opportunity there,” Kessler told The Insurer TV at this year’s WSIA Underwriting Summit in Phoenix, Arizona.

After he took the reins at the beginning of this year, Kessler’s division expanded to include CRC Commercial Solutions businesses CRC Brokerage, CRC Binding, and Tapco, along with the firm’s life, retirement and benefits businesses.

Last month, this publication reported that CRC’s parent company Truist Insurance Holdings (TIH) sold its last remaining stake in the insurance brokerage to a private equity group that includes Stone Point, Clayton Dubilier & Rice (CD&R) and Mubadala Investment Company. Last year the firm sold a 20 percent stake in the business to Stone Point.

The sale is expected to be completed in Q2.

“I think you'll see us get back in the [M&A] game, we anticipate 2024 being kind of a big year, 2025 probably being a bigger year for us.”

Kessler said he’s open to small acquisitions, but is also eyeing some larger platforms that CRC “would love to partner with.” Organic growth is also on his radar, as Kessler looks to grow his team with key hires.

“We've been very active on that in the last four or five years, hiring hundreds and hundreds of new producers – record class last year, on pace for a record class this year.”

Ultimately Kessler said the CRC mantra is “growth” across underwriting and wholesale.

“We anticipate strong growth across those businesses. So far, January was a record month for us. February's a record month in the books, we're off to a great start in March,” said Kessler.

The last 5-7 years were part of a growth cycle for wholesale, and Kessler said he sees no signs of a slowdown.

“ I think when I step back and think about it, I think we're starting to talk about the durability of the wholesale market,” said the CEO.

“We're starting to talk about seeing some changes in what's driving the wholesale channel today, in terms of product mix, geography, those kinds of things.”

Kessler is also sensing the increased interest in the property market, and closely watching changes underway in the liability market. Another growth segment he’s gauging is continued growth in the E&S space.

Retail vs wholesale

Though some retailers may initially resist wholesalers or use them only grudgingly, Kessler said retailers view CRC as specialists, brought in to assist with certain business lines and, ultimately, bring expertise that offers them an advantage.

“If you're sitting there as one of our clients, we have expertise on a variable cost, not a fixed cost model. We only get paid when we win… that's the value we've provided,” said Kessler.

And with global risk showing no signs of abating, Kessler expects specialty to remain strong.

“We think the era of the specialty distributor and the specialty broker is not going away anytime soon. In fact, we see, kind of, wind at our back when we think about it.”

Others in the business may also be feeling that wind, if the ongoing trend of retailers diving back into wholesale could be considered a leading indicator. But Kessler insists he welcomes the competition, and doesn’t see it as a threat.

“From my perspective, it's not a massively new trend that's reshaping what we do all day. It's something that's been tried on and off for a significant period of time.”

With or without new entrants into the wholesale space, Kessler said CRC’s goal is the same, to deliver value for clients.

“We serve at their pleasure. And that's what we continue to tell our people: that we have to be sure that we're doing all that we can to win and not take anything for granted.”

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