Northrim sells insurance subsidiary for $4.6M
Northrim BanCorp Inc. has sold its Northrim Benefits Group to Michigan-based Acrisure and the new company will be rebranded as RISQ Consulting.
In a deal announced Aug. 14, Northrim BanCorp sold most all of the assets associated with Northrim Benefits for $4.6 million and the new company will combine services and workforces with Acrisure subsidiary Insurance Brokers of Alaska to form RISQ Consulting.
Acrisure, a national insurance brokerage company selling insurance and risk management services, is the 12th-largest insurance agency in the United States with more than 120 affiliated agencies. Northrim Benefits Group will be Acrisure’s second acquisition in the state after the company purchased Alaska USA Insurance Brokers Commercial Insurance and Employees Benefits in December 2016.
The move gives the new company a wider range of tools to help small, medium and large businesses manage their employee health care benefits programs, said Joshua Weinstein, president and employee benefits consultant at Northrim Benefits Group. It also gives access to greater options in risk management and workmen’s compensation, the full suite of required insurances for companies to operate.
“With our strategic partnership and expansion into employer services over the last year, and our new holistic approach to how risk is identified and managed, we feel this new brand is a better reflection of the products and services that we will provide,” said Weinstein. “You will receive consulting and support from the same individuals you know today, and our office location and phone number remain unchanged.”
RISQ Consulting will be also able to assist with the sales and service of business insurance that isn’t part of an employee benefit plan such as property and casualty coverage, surety and bonding.
“We purchased our ownership in Northrim Benefits Group in 2005 to provide additional financial services to our growing customer base,” said Northrim BanCorp President and CEO Joe Schierhorn.
“Today, we believe there are benefits for Northrim Benefits Group to align with Acrisure, as the health insurance industry continues to evolve.”
Northrim’s $4.6 million sale generated a net profit after taxes of $2.7 million, or $0.39 per share, in the third quarter of 2017, according to the company. In 2016, Northrim Benefits contributed $3.8 million, or 3.8 percent of Northrim’s total revenues.
Current management and staff of NBG will remain in place following the transaction, which closed on Aug. 14.
“We are excited to affiliate with Acrisure to provide even more insurance products and services to our customers,” Weinstein said.
Currently, Northrim Benefits helps companies of all sizes and families coordinate and build health care benefit plans such medical, dental and vision.
Prior to the Affordable Care Act in 2014, Northrim Benefits acted as a broker to help connect both individuals and businesses with health and risk insurance options. Under the Affordable Care Act, the company helped broker insurance policies on the federal individual market exchange, Weinstein said. He emphasized that the benefits group is not an insurance company.
As Northrim Benfits did in the past, RISQ be offering assistance to people navigating the insurance market exchange this fall during open enrollment under the ACA. Individuals can call for an appointment.
With Alaska now left with one individual market insurance carrier – Premera Blue Cross Blue Shield of Alaska — that portion of the Northrim Benefit’s work continued but without the advantages of offering clients more choice.
“Now, under the individual market, policies are more politically volatile as well. As a brokerage, we link those who need an insurance policy with a carrier selling the policy,” he said.
The sale will bring more resources from one of the fastest-growing insurance brokerage firms in the country.
“Acrisure has doubled its revenues and remains on an ambitious growth path that follows the trend to consolidate for better insurance options,” according to MiBiz, a business publication out of Michigan where the company is located.
Acrisure has bought 120 companies on the philosophy of preserving local relationships with customers but overcoming some of the industry fragmentation that can cause expense through lack of options, MiBiz recently wrote.
Weinstein points to the way Acrisure seeks to retain the local management team and maintain the brand equity the prior owners built in their markets over the years. Some of Acrisure’s deals have been for agencies that have been in business for 90 or 100 years, MiBiz reported. The seller will typically retain a minority ownership stake in the agency.
“They don’t follow a typical acquisition model,” Weinstein said. “They don’t want to come in and upset the applecart of what has been successful. They provide more support with more nationwide tools.”
There may be more options down the road for health benefits offered by RISQ, because health care is continually evolving under the U.S. political system, he added. Currently, Northrim adds to the public policy debates in Juneau on insurance laws and regulations, hoping to bring down costs in what is considered the most expensive state in the U.S. to insure.
“While we’ll be able to offer employers and individuals new and innovative ways to finance health care services, many of the affordability problems aren’t insurance-based but are more regulatory and also stem from the underlying growth in healthcare costs themselves,” Weinstein said.
“Our partnership will assist our clients in purchasing the right kinds of care, at the right time, and in the right place — all of which affect costs and premiums in a desired direction.”
Northrim’s President Schierhorn said he’s excited to join resources with Acrisure and rebrand.
“This positions us to be the second largest in the state, giving us more options and resources,” he said. “Northrim works with a variety of customers — we don’t want to disrupt that relationship. We view this as an opportunity to maintain our long-term relationships and offer them a relationship with a firm that provides our customers with more options going forward.”
Naomi Klouda can be reached at [email protected].