Brokerslink, a global network of independent brokers and risk consulting firms, has transformed itself from a nonprofit association to a for-profit corporation.
The group was founded in 2004 by José Manuel Dias da Fonseca, group chief executive of MDS, a Portuguese brokerage that also has a big presence in Brazil and Angola. He currently serves as CEO of Brokerslink, which has its headquarters in Zurich.
The original business model was created so all of the broker members were able to protect already existing clients, Fonseca said. “We decided we should be more than that. We should be creating business, not just managing business.”
To further that aim, he said, required better financial alignment among Brokerslink members. Incorporating allows the group to have resources to finance a strong business development team, invest in reputation and branding awareness, and build the necessary infrastructure.
Brokerslink is in the process of offering shares to firms within the association, which are in more than 90 countries around the world and have written more than $20 billion in premiums and consulting services.
The full transformation into a corporation will be finalized when the organization completes its private stock offering, said Paul Bitner, the organization’s managing director, who is based in Houston.
Initial stockholders are MDS of Portugal, Crystal & Company of the U.S., Nova Risk Services Holdings of Hong Kong, Filhet-Allard of France, and CGNMB of London.
Previously, the organization was funded by member fees and sponsorship from insurers, but fees and sponsorships are limited, Fonseca said. Raising money through the stock offer will allow Brokerslink to finance its business expansion.
Bitner said that mergers and acquisitions within the industry create opportunity for brokers within Brokerslink “because there is less choice.”
“We feel that there is a niche in the market for clients that don’t want to work with the big brokers,” Bitner said.
The organization offers other advantages as well, he said. In addition to size, Brokerslink has in-country expertise because its brokers are native to that country. The group also does not need to worry about the short-term investor demands that sometimes plague publicly held brokerages.
“Another component is our different structure. We are structured in a way that is not U.S.-centric or London-centric,” Bitner said. “Our ideas are not coming from the traditional centers of insurance. They are coming from around the world.”
The organizational structure limits participation to one broker per country. In the U.S., that broker is Crystal & Company, whose executive vice president, Jamie Crystal, serves as chairman and an executive director of Brokerslink.
Bitner said the brokers associated with Brokerslink are selected carefully, using qualitative and quantitative measures, including references from insurance companies and client retention data.
“They need to be strong and well-respected in the local market,” he said.