The CEO of Acrisure LLC is in “no hurry” to take the multibillion-dollar insurance brokerage and fintech public as executives aim to double revenue in the next few years and global economic and geopolitical uncertainty persists.
Acrisure co-founder, chairman and CEO Greg Williams addressed the company’s outlook at a sold-out luncheon of the Economic Club of Grand Rapids on Monday.
Citing recession fears, high interest rates, military conflicts and “plummeting” business valuations in certain sectors, Williams said “it feels like the worst time in the world to ever think about going public, so we’re not.”
Keep up with all things West Michigan business. Sign up for our free newsletters today.
Bloomberg reported in June that Acrisure had been interviewing investment banks about a possible initial public offering in 2024. Williams later told the trade publication Business Insurance that he was “leaving all options open” and that Acrisure would “probably” go public at some point.
After the Econ Club event, Williams told Crain’s Grand Rapids Business that the company is still “preserving optionality” for such a move, “but we’re in no hurry to do anything. … There’s no time frame of any sort.”
Instead, Acrisure — which employs 17,000 people globally — is focused on an artificial intelligence-driven transformation of its business model that is shifting the company from insurance product sales-driven to using technology to anticipate and meet clients’ business needs, from cybersecurity services to payroll and payment processing. That’s why the company is increasingly using the term “fintech” to describe itself rather than just “insurance brokerage,” Williams said.
“The reality is, we’re in the process of changing almost everything about our business,” Williams said during his presentation.
He estimates the transformation will help grow the company from its current $4.3 billion in annual revenue to roughly $8.5 billion to $9 billion by 2027.
Williams acknowledged that transforming the business has drawn critics who have called the company “crazy” for changing a “winning formula” that has already propelled Acrisure to becoming the sixth-largest insurance brokerage in the world, according to a July 2023 Business Insurance ranking.
“I only care about what is our potential and fulfilling that potential,” he said. “What others are doing, I don’t care.”
Acrisure’s journey to an AI-driven business model began in 2019 through a joint venture with Pittsburgh-based AI insurance platform Tulco and resulted in Acrisure buying Tulco’s insurance practice in 2020 for $400 million.
“Most of the people in the room from Acrisure that are here, if I injected them with truth serum and said, ‘Tell the truth,’ they’d say they thought I was nuts in 2020 for investing $400 million in artificial intelligence,” Williams said. “Fast forward three years, and I don’t know if we’d find anybody thinking that we’re nuts.”
Eight months after the acquisition, Tulco’s former executive vice president, Matt Marolda, joined Acrisure as chief innovation officer. Within two years, he built an “innovation team” that numbered 150 employees as of April and had rolled out three proprietary AI platforms: One for sales called Auris; one for employee benefits quoting called Suvaun; and a third, unnamed marketing platform that helps the company find and target new clients.
Since 2019, Acrisure has gathered 141 billion data points on 170 million Americans, or about 800 data points per person, Williams said. That data is used in predictive modeling and propensity rankings to give the company inroads into better tailoring its marketing and sales efforts to the right audiences, cutting spending through tech efficiencies.
As a result of the AI investment, the company’s “producers,” or sales staff, who use Auris have grown their book of business 3.4 times faster than those who do not, Williams said.
Additionally, the company has massively expanded its reach with American businesses as part of its reinvention strategy. Today, one in every 20 businesses in America (5.4%) is an Acrisure client, Williams said.
Acrisure has historically used an aggressive mergers and acquisitions strategy to drive the company’s revenue growth. However, 2023 is the first year since 2017 that the company hasn’t aimed for 100 or more acquisitions. Acrisure has closed “only” about 75 deals so far this year, Williams said.
That’s partly because of a more expensive capital environment because of interest rates. The other component is that — besides becoming AI-driven — Acrisure is focusing on other strategies in its transformation plan.
That includes changing its operating model by integrating its 1,000 “partner agencies” that previously operated with independent brands into the Acrisure brand and dividing them into 18 regions across the company’s 21-country footprint by 2024.
Another strategy is investing in brand building through naming rights deals and sponsorships like the $30 million donation that secured the naming rights to the Acrisure Amphitheater planned in downtown Grand Rapids, as well as the naming rights to the home stadium of the NFL’s Pittsburgh Steelers.
Williams told Crain’s Grand Rapids that while Acrisure “at this juncture” is not involved with committing a naming-rights sponsorship for the proposed Grand Rapids soccer stadium, the company is “keeping apprised of what’s going on” with the project.
Rounding out its other goals, Williams also said the company is in the middle of a yet-to-close fund raise that, when completed, should give the company a valuation of nearly $27 billion. In May 2022, the company closed on a $725 million Series B-2 preferred equity raise and received a $23 billion valuation.
“Frankly, for me, the thing I’m most proud of is not what we built,” he said. “It’s what we’re transforming (into) … something that’s different and better.”
More from Crain’s Grand Rapids Business:
DeVos-owned Fox Motors acquires Up North powersports dealer
More small, mid-market M&A expected in 2024, survey finds
Wolverine World Wide ‘turnaround’ continues with job cuts, restructuring
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.