Building a ‘forever company’ in a competitive brokerage market

Curtis Barton (pictured) has dedicated over 25 years to the insurance industry, focusing on building, growing, and leading companies with a vision to transform the sector.

As the CEO of ALKEME Insurance, Barton successfully spearheaded the merger of seven entities to form the firm in late 2020, amid the chaos of the pandemic. He also secured private equity funding from GCP Capital Partners and achieved over 100% year-over-year revenue growth in 2021, with projections to double revenue again in 2022, while maintaining a double digit organic growth rate. No mean feat in the current market. 

“We were all part of a cluster – I’d been in that cluster with my family-run agency for 20 years,” Barton told IB.  

The decision to break away stemmed from a shift in the cluster’s management. Barton, unhappy with the new direction, rallied eight friends to start their own cluster. He then recruited Anton Rosandic, an expert with deep experience in insurance and private equity, to join as COO. This move was the foundation of what would later become ALKEME.

ALKEME’s strategy centers on building a “forever company,” a concept Barton contrasted with competitors who prioritize rapid growth and financial engineering over organic growth and consolidation.

“We’re looking for pieces that fit in our puzzle,” he explained. “We’re not trying to jam pieces into the puzzle. And that’s been the big mess, in my opinion, in the space – that the market rewarded hyper velocity in the M&A sector and didn’t focus on organic growth at all. It was an afterthought – [there was no] focus on consolidation or integration.”

Conversely, at ALKEME, organic growth is their life blood. As Barton told IB, this all comes back to strong networking, self-marketing and attending the most important events.

“Most agency founders like to do that – being in the community, going to events, making connections and growing their business,” Barton added. ALKEME aims to lift the non-revenue-producing burdens off these founders, allowing them to focus on growth while ALKEME handles the back-office functions.

“We challenge them to be the entrepreneur in charge of their P&L,” Barton added. “It’s really about the owner-operators.

The firm maintains a detailed scorecard for each potential deal, evaluating various parameters to ensure the right fit. This methodical approach helps ALKEME identify partners who align with their long-term vision.

“We look at a bunch of things, so we keep a scorecard,” Barton explained. The scorecard helps the team learn from both successful and unsuccessful deals, refining their selection process over time. 

And, despite the rigorous selection process, Barton told IB that ALKEME had completed 15 deals in the current year alone and expected to close between 25 to 30 by year-end. The company prioritizes integration, bringing new partners on to ALKEME’s systems and platforms.

“You can’t just stack companies up and just leave them on their own,” Barton stressed.

Looking ahead, Barton is clear that ALKEME is not slowing down. The focus remains on quality over quantity, with an eye on acquiring larger, more sophisticated agencies that bring depth and talent to the table. Barton emphasized that this strategy is about building a stronger, more resilient company for the long haul. 

Barton also touched on broader industry trends, particularly the shift in investor mindset due to interest rate pressures. “Nobody cared about organic growth five, six years ago,” he said, noting the current focus on sustainable, long-term growth. This change has attracted high-quality investors to the space, making it a very active market.  Barton also highlighted the importance of technology in modernizing the insurance business. While he recognizes that insurance is fundamentally a people business, he also sees the necessity of deploying technology to augment operations and drive efficiency.

“If you’re not making that investment…you’re going to run into trouble,” he warned.