Racine-based Johnson Financial Group plans to sell Johnson Insurance Services to Boston-based Risk Strategies, a specialty insurance brokerage and risk management consulting firm.
Terms of the deal, which is expected to be complete in 45 to 60 days, were not disclosed.
Risk Strategies in the ninth largest privately held U.S. insurance brokerage and has revenues of around $1.3 billion annually. Johnson Insurance Services has 140 employees across Wisconsin and is among the top 10 largest independent insurance agencies in the state.
“We’re pleased to have found a partner in Risk Strategies, that has the scale, expertise and depth of capabilities to take the Johnson Insurance business to the next level,” said Jim Popp, president and chief executive officer of Johnson Financial Group. “Most importantly, our current Johnson Insurance customers will see little to no disruption in service.”
John Mina, CEO of Risk Strategies, said the firm is “honored” to be selected to assume operations of JIS.
“We feel strongly that our organizations are a great fit and the business, clients and employees will thrive,” Mina said.
Popp noted that Risk Strategies is not simply buying the JIS book of business and moving it out of state. Rather, the acquisition covers all of JIS’s people, operations and contracts. The business will eventually transition to operate under a Risk Strategies brand.
“With Risk Strategies we’ll get the strength and expertise of a large national brokerage firm and the culture of a privately held organization with an employee-first commitment,” said Joanne Szymaszek, president of Johnson Insurance Services.
Johnson Financial Group began taking a closer look at its insurance business in the fourth quarter this past year, Popp said. He noted that industry dynamics and trends combined with Johnson’s own strengths and weaknesses led to the decision to sell.
“We kind of came to a conclusion at the end that partnering up with an agency that was bigger, that had more scale … was probably something that made a lot of sense,” Popp said. “Managing risk in this day and age has become more complex than ever before.”
After deciding to sell the business, Popp said the Johnson Financial Group team evaluated the market for current buyers and sellers, narrowed down to a smaller number of firms, conducted in-person interviews and did due diligence with three or four firms.
Eventually, Risk Strategies and Johnson Insurance Services “mutually selected each other.”
“They’re a big agency, but they feel a lot like us,” Popp said.
The acquisition of JIS will mark Risk Strategies’ first move into Wisconsin and the structure of the deal means all of the 140 employees will continue on with the buyer.
“It was one of the defining factors for us, candidly,” Popp said.
Selling the insurance business does take something away from Johnson Financial Group’s offerings, which also include banking and wealth management. Popp said that reduction in offering was one of the harder parts about moving forward with the sale, but added it was more important to do something that would be best for customers in the long-term.
“We didn’t do this because we think the agency wasn’t performing at a high level,” he said.