“Grow or die” has been a business mantra for a long time. And from the pace of merger and acquisition activity in 2021, it remains a staple of the business landscape.
For Charlie Lydecker, the CEO of Foundation Risk Partners, it is an essential ingredient in the company’s success. But it’s not about getting bigger, it’s about getting better.
“I believe you grow or die,” Lydecker said. “If you’re growing your company, that means you are able to increase income for team members, pay better bonuses for team members and make sure you provide the superior services for your clients.”
Lydecker said some companies eschew growth in favor of cost-cutting as a means to build a lasting business, but that strategy has its own pitfalls.
“Sometimes I see companies that are not growing and their focus is in the wrong place,” he said. “It’s just a matter of time before you can’t cut anymore.”
In the case of Foundation Risk Partners, growth has been a central focus of the company from Day One.
The insurer launched in late 2017 and is a holding company of a number of insurance brands.
“There are more than 30 different brands in 15 states that we own,” he said, including some well-known local companies. And a big part of the acquisition strategy of Lydecker and the management team at Foundation Risk Partners is keeping the holding company in the background in favor of the new acquisitions.
“Their names are just so valuable and connote trust and security and community commitment that we just never felt comfortable changing the names,” he said.
That strategy has paid dividends for the company which will soon surpass $350 million in annualized revenue and is now ranked the 18th largest insurance brokerage in the United States.
“We have been one of the fastest-growing in the United States the last three years, and two years ago we were the fastest growing,” he said. “It exceeded our expectations and I’d be lying if I told you this was all part of a master plan.”
That may be true, but the execution of the company’s growth strategy has been masterful.
Among the earliest acquisitions by Foundation Risk Partners were local companies Mitchell Noel Insurance and Reames Employee Benefits Solutions.
Mitchell Noel Insurance was a fixture in the local insurance market for more than 60 years. The business operated from 1956 until the merger with Foundation Risk Partners at which point it changed its name to Halifax Insurance Partners. The Reames’ history in local business circles stretches back even farther. Julie Reames said her husband, Bert, worked in the industry beginning in 1955 until his passing earlier this year.
“We couldn’t have made a better choice,” Reames said. “We were pleased with the vision they have, and continue to have, because it has taken our vision to a new level.”
Reames said she and her husband had been approached before by other large companies but never found a good fit–adding, a bad experience with a former partner made her wary of future deals.
“We attempted to bring in a partner and actually sold the business to him back in 2004,” she said. “That did not work out well.”
Reames said once the non-compete clause they had signed as part of the deal expired “we quickly knew we had to take the business back so we could control it.”
Rather than simply sell off the business, she and Bert saw the deal as an opportunity to grow Reames Employee Benefits Solutions.
“It gave us a whole other area to go into,” she said. “It was a coming together of great minds and wanting to be successful and having the same thought processes that we had. (Foundation Risk) had the ability to do it even bigger and better.”
The partnership with Foundation Risk Partners offered a chance to work with a company that shared the Reames’ customer-service philosophy.
“My husband’s philosophy in taking care of the clients was ‘You take care of the clients and the rest of the money will come,’” Reames said. “It’s very important that you develop and maintain those relationships. That’s why we thought Foundation Risk Partners would be such a good fit. They are community-minded too.”
Reames said the relationship also gives her the chance to stay active in the business.
“Rather than kind of go away into the sunset, I can be as involved as I want to be,” she said.
Lydecker said the idea for Foundation Risk Partners was to build a fully integrated agency system, which enabled the company to position itself in the insurance space in a much more technologically advanced way. And it was a plan that required the company and its leadership to be nimble and open to new methods and processes.
“It’s where we can take on and take off with any type of newly invented software products and it positions us nicely for the next 20 years,” he said. “From the very first acquisitions we were flying the plane and building it at the same time.”
The company’s focus on technology puts it in a strong position to continue its growth strategy through 2021 and beyond.
According to a Deloitte Insights report, a survey of insurance industry executives found that nearly 80 percent of respondents said the Covid-19 pandemic revealed shortcomings in digital capabilities.
It appears, Lydecker and his team are part of the 20% who have prepared for those shortcomings, even during a pandemic. Lydecker said one of the other keys to the company’s success – and part of its overall growth strategy – is the “wonderful group of partners and team members” that have joined together to create Foundation Risk Partners.
“It’s a like-minded group of insurance professionals that are focused on taking care of our clients,” he said. “And it gives us more capabilities in the marketplace for our clients.”
Lydecker said both sides of that equation – building the right team and focusing on clients – go hand-in-hand with strong growth.
“If you are providing the best services for your clients and you’re a client-focused company, you can’t be client-focused without being team-focused,” he said. “That’s just a core philosophy.”
Lydecker said that was true with the acquisition of Reames Employee Benefits Solutions as well as one of the other important initial acquisitions, the Mitchell Noel Agency which was rebranded as Halifax Insurance Partners.
“We were growing every year, but by smaller increments,” said Rich Cooper, Executive Vice President of Halifax Insurance Partners, who lead the company for 10 years following his father’s leadership. “I was always looking for ways to really make things grow.”
Cooper said when the opportunity to join Foundation Risk Partners came up, he jumped at the chance.
“I thought it would be a great opportunity to be part of that,” he said. “I really wanted to be part of it and wanted to be part of it in the beginning.”
Cooper said most of Mitchell Noel’s clients have stayed with the new company, as have many of its long-time employees.
“It’s been a growth experience for all of us,” he said. “The clients are getting better service and for myself, it is an opportunity to be part of something bigger.”
Cooper said he shares Lydecker’s perspective on growth and put a fine point on just how important a growth strategy is, especially in the insurance industry.
“There’s attrition every year,” he said. “You’re going to lose some clients. It’s just natural your business will shrink year-over-year if you don’t do something. To be relevant, you have to keep growing.”
Foundation Risk Partners growth strategy through acquisition has also provided an added bonus, Cooper said.
“I’m now working alongside a lot of the people I used to compete against,” he said. “It’s been a fun experience, I think, for all of us.”
Cooper said the growing company also offers clients the benefit of years of industry experience.
“There’s just great institutional knowledge we get to share with each other,” he said. “And I haven’t met anybody that has come into the family that hasn’t had a good experience. Everybody is really excited and happy to be part of something new and growing so rapidly.”
Creativity is usually the province of the artist or writer, but creating a business that lasts requires the right combination of talent, commitment and vision. For Foundation Risk Partners, putting the right people in the right places has paid off in strong growth and recognition as a good corporate citizen.
That means building a team focused on the bottom line and connected to the community.
Alan Florez, national sales director at FRP, has been part of the team from the beginning and brings a wealth of experience from within the industry and beyond.
Florez worked for Florida Gov. Jeb Bush from 2001-05, before moving to the insurance industry, where he has worked ever since. His experience ranges from sales, training and operations to growth for large commercial insurance brokers.
He said joining FRP was “an opportunity to play a meaningful role in the building of a new top-tier insurance sales organization.”
Florez said building the right team also means finding people with the right experience and temperament to succeed.
“Our key has been to be able to take strong existing agencies and leverage first-class expertise and resources to ensure meaningful growth,” he said, citing some of the firm’s acquisitions. “That is a great example of having the right team in place. Fortunately, we are duplicating this throughout the country and we are fortunate to be surrounded by over 1,500 outstanding team members.”
As for the idea of “grow or die,” Florez said it is a necessary perspective for success in today’s business climate. And it can serve a broader, community purpose as well.
“It has to be a core part of a company’s culture, from our perspective,” he said. “Fortunately, we are surrounded by many co-workers and leaders who, of their own volition, contribute significantly to the community.”
That is something Chris Tolland, CEO of Halifax Insurance Partners and executive vice president of Foundation Risk Partners of Florida, brings to the table, both at work and in the community.
“I currently serve in a director capacity on several non-profit boards within the local community,” he said. “Within each of these organizations, we consistently look for new ways to raise much-needed awareness, support and funding which can have the effect of decreasing reliance on potentially unstable funding sources.”
Those organizations include the Council on Aging of Volusia, the Boys & Girls Clubs of Volusia and Flagler Counties, Crime Stoppers of Northeast Florida and the Conklin-Davis Center for the Visually Impaired.
That team approach also informs Tolland’s role with Foundation Risk Partners.
“Our team defines our success and we truly take a team approach at Foundation Risk Partners,” he said. “Growth, in our business, requires the right teammates and I am so proud to work with our teams at Halifax Insurance Partners and Foundation Risk Partners.”