THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, June 20, 1996 TAG: 9606200561
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
DATELINE: NORFOLK LENGTH: 65 lines
Century-old Henderson & Phillips Insurance, the largest locally based insurance agency in Hampton Roads, is being bought by a rapidly growing insurance-services company based in San Francisco.
USI Insurance Services Corp. plans to use Henderson & Phillips as its regional hub in the Southeast, said George G. Phillips Jr., chairman of the Norfolk-based agency.
Henderson & Phillips' management and its 140 employees will remain after the acquisition, which is scheduled to close late next week, he said. The agency also will keep its name.
Henderson & Phillips had talked to other companies in recent years about a possible sale, but Phillips said it settled on USI partly because he has known USI Chairman and Chief Executive Bernard H. Mizel for several years.
``He talked to me about his vision for USI before he started it'' in 1994, Phillips said.
Phillips, who holds the majority ownership in Henderson & Phillips, wouldn't disclose the value of the transaction or the terms.
In an annual ranking of insurance agencies and brokers last July, the trade magazine Business Insurance reported that the value of private insurance brokers had fluctuated during the past decade between 1.2 and 1.4 times their annual revenues.
With gross revenues of $12.7 million in 1995, Henderson & Phillips would be worth between $15 million and almost $18 million, according to that measure.
The sale of Henderson & Phillips comes at a time when the company is celebrating its 100th year in business. It also occurs in the midst of a sweeping consolidation among insurance agencies. Hurt by narrower profit margins and intense competition, agencies throughout the country have been selling out to larger, financially stronger companies.
For the past three years, Henderson & Phillips has had steadily improving profits, including record earnings in 1995, Phillips said. Still, the company lacked the financial resources to significantly expand operations on its own, he said.
After growing rapidly during the 1970s and '80s, Henderson & Phillips had nine offices and more than 200 employees by 1989. In an effort to improve its faltering profitability that year, the company began reducing its work force and closing offices. The company eventually shut offices in Nashville, Tenn., Alexandria and Portsmouth.
Henderson & Phillips ranks 66th in revenue size among the nation's 100 largest insurance agencies and insurance brokers, according to a July 1995 list compiled by the magazine Business Insurance. Henderson & Phillips' revenues peaked at $14.53 million in 1990.
Since its formation two years ago, USI Insurance Services has acquired more than 30 insurance agencies and insurance-related companies. USI, which has established a presence in the western United States, the Midwest and the Northeast, expects to make several acquisitions in the Southeast, Phillips said.
``We will be looking not only for property and casualty agencies but for life and benefit agencies,'' he said.
The arrangement with USI will provide Henderson & Phillips' management with significant autonomy, said Phillips, who will have a seat on USI's executive management committee.
In addition, Henderson & Phillips' Norfolk office will handle certain tasks, including accounting work, for other agencies in the Southeast that USI acquires, he said. by CNB