Arthur J Gallagher & Co. (AJG - Free Report) recently acquired Regency Group to enhance and extend its brokerage services in the East North Central region of the U.S. The transaction amount remained undisclosed.
East Lansing, MI-based Regency Group was founded in 1981. The wholesale insurance broker and program administrator offers group and large firm self-insured, tailor-made workers compensation programs and services. The company serves independent retail insurance broker clients across Michigan. The insurance broker focuses on program design, regulatory approval and compliance, as well as administration and claims management. This apart, the acquired company offers retail specialty programs and products for the landscaping, retail hardware and restaurant industries. We expect the buyout to further boost the already robust inorganic growth portfolio of the acquirer. Post acquisition, Regency Group will continue to operate from its current location.
Regency Group’s in-depth industry knowledge, trade association relationships and niche expertise will be highly value accretive to the acquirer’s client portfolio. In addition, the acquired company’s strong carrier relationships, which are essential in placing risks for retail clients and proficiency in workers compensation programs, will add significant value to Risk Placement Services, Inc. – an affiliate of Arthur J Gallagher. The acquired company’s solid Michigan foothold will also complement the acquirer’s insurance brokerage services.
Notably, this is the 21st takeover by the company this year. Recently, Arthur J Gallagher purchased Victory Insurance Agency to boost insurance brokerage and risk management services in Houston as well as extend its presence in Texas.
Arthur J Gallagher is known for improving its growth profile through prudent acquisitions. Most of the buyouts by this company are within the brokerage segment. This apart, Arthur J Gallagher has increased purchases in the retail employee benefits brokerage and wholesale brokerage sectors. The brokerage service provider intends to pursue smaller tuck-in mergers in 2017.
Currently, Arthur J Gallagher carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the insurance industry are Mercury General Corporation (MCY - Free Report) , National Interstate Corporation and Arch Capital Group Ltd. (ACGL - Free Report) .
Mercury General is a property and casualty (P&C) insurer engaged in writing personal automobile insurance in the U.S. The company delivered positive surprises in two of the last four quarters but with an average miss of 21.04%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
National Interstate is a specialty P&C insurance company that operates primarily in the U.S. The company delivered positive surprises in two of the last four quarters with an average beat of 10.21%. The company sports a Zacks Rank #1.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarter with an average beat of 9.27%. The company holds a Zacks Rank #2 (Buy).
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