B&W’s Danny Kaufman: Intermediary targeting mid-to-high teens growth in ’24

Burns & Wilcox president Danny Kaufman has said the wholesaler delivered 20 percent growth in the fourth quarter and is targeting “mid-to-high teens” growth in 2024, with the firm’s revenues up by 23 percent through February.

Speaking to The Insurer TV in a wide-ranging interview alongside HW Kaufman executive Marc Fuhrman, the duo also discussed the firm’s investments, its M&A outlook and commented on market conditions.

The pair – speaking from this week’s WSIA Underwriting Summit in Phoenix, Arizona – said the company grew by around 15 percent in 2023, adding that the M&A environment is increasingly favouring strategic buyers such as Burns & Wilcox.

“When we plan[ned] for this year, we [were] actually a little conservative because now through February, we're up over 23 percent, and I don't see much slowing down for us,” Kaufman noted, saying the firm is growing “across all lines of business, all areas”.

He specifically highlighted MGA RB Jones as driving “tremendous growth”, while renewal retention across the firm is “up drastically” along with new business production and policy count.

“Everything is up. So assuming that we can keep this going, we're going to see tremendous growth this year, and it's not just based on the market. It's also market share for us,” he commented.

Fuhrman noted that retailers are continuing to consolidate their wholesale panels, which he said is a “great growth opportunity” for Burns & Wilcox.

Retail-wholesale complex

Kaufman acknowledged efforts by retailers to capture more wholesale business in-house, but also pointed out that some of those firms are abandoning efforts to maintain wholesale operations, calling the trend “hit or miss”.

“We actually made an acquisition late last year from one of our preferred retail partners [where] they decided to go into wholesale and [then] exit wholesale. So some will do it and succeed, and some will see that it's not a core business and maybe they'll exit,” he noted.

Fuhrman pointed out the “flip side” to retail intermediaries trying to get into wholesale is the problem of channel conflict and access.

There's that channel conflict that comes into play today with some of our competitors because they are owned by a retailer, so it's a double-sided coin,” he noted.

Kaufman said Burns & Wilcox is looking to double in size by 2028, and then at its current growth rate, the company could reach that goal ahead of schedule.

In the next nine to 18 months, we want to keep compounding growth in the mid-to-high teens. We're on pace to grow, really, by 20 percent, give or take. To do that, we will need to effectively roll out our technology, which we're doing well right now,” he commented.

On M&A, Kaufman said the company is “certainly” seeing a lot more opportunities amid a higher interest rate environment that has somewhat dampened the appetite among potential financial sponsors to do deals.

“We've closed a few deals last year, precisely for that reason. Because we're strategic, we don't rely on debt markets to acquire. We don't like debt, frankly. So there's less competition in the marketplace. We're very choosy with who we acquire, when we acquire, why we acquire,” he pointed out.

“We acquire for strategic reasons, for fit, for culture – not because we're looking to add Ebitda or because we're looking to add revenue. It's a different model than a lot of our competitors out there. We're going to continue to be picky and we have some growth going on right now. We'll see what happens with those,” he concluded.

Industry remains in “throes” of tough market

Kaufman said the industry remains “in the throes of a tough market”, but added that a shift is underway with appetite on the rise among carriers to write tough business.

“The E&S market is still a difficult market. We're fortunate at Burns & Wilcox [that] we're still growing, we're still getting a lot more capacity from the market, which is great,” he commented,

“We know that some of our competitors aren't faring as well, so markets are coming to us to partner strategically to deploy capacity in some difficult areas in California and the Gulf, [and] East Coast,” he explained.

Discussing specific lines of business, Kaufman said middle market casualty underwriters “are still relatively aggressive” on accounts perceived to be rate adequate and interested in growing in primary casualty.

In contrast, large account casualty remains a mixed picture and “very difficult” according to Kaufman, with some carriers “pulling back” while others have been willing to deploy more capacity.

In property, carriers are operating “strategically” in their deployment of capacity.

Fuhrman highlighted the success the intermediary has had in personal lines, a segment in which it is the biggest wholesaler in the US.

“A lot of people are coming to us and wanting to work with Burns & Wilcox because of our abilities, our capacity, our aggregate to work in personal lines,” Fuhrman noted, saying the intermediary is “growing tremendously” in the segment.

“We have aggregate and capacity that a lot of our competitors don't and we're utilising that really well,” he said, highlighting capacity the firm has in places like California and Florida, where the company has aggregate it can still deploy.

“But people just don't think we do. So they don't come to us for that reason. So we're out there really letting the market know that we can do business in those states,” he added.

Kaufman pointed out that unlike competitors that might write Florida business excluding wind or California business excluding wildfire, the intermediary is able to provide those coverages.

Aggressive in adding top talent

Both executives noted that the company has been “very aggressive” about adding “top talent” at all levels of experience, and that the family-owned operation is a “great place” to build a career and a book of business.

It's not just wholesalers: it's retailers, carriers, everybody is trying to get talent because of the volume we're doing right now,” Fuhrman explained.

“We are able to attract a lot of good talent [because] we are different, because we are not owned by Wall Street, [or] equity firms. We're a family-owned business [that’s] much more together. We work together, we collaborate together, it's not cutthroat, we have a different story that we can tell and we are attracting some great people,” he added.

Fuhrman said the company “set records” with its hiring in 2023.

“It's a great place to be. We can actually tell people, ‘you're going to be busy, you're going to be working’, because of all the businesses that's happening,” he explained.

Kaufman said the business doesn’t measure success in quarters but in years and decades, while observing that it has invested heavily in technology as well as talent, efforts that have started paying “dividends”.

“We're now rolling that out, we're starting to see a lot of benefits from it. It's also helped attract talent. Great talent wants top technology, then top talent is also attracting other top talent,” Kaufman said, saying that the firm’s $100mn in IT investments have been three years in the making.

Commenting on investments in talent, Fuhrman said the company has identified high-potential talent within the firm and is hosting a producer forum at its headquarters next week.

We're investing in these people, training them, we're mentoring them, getting them to the next level. So Burns & Wilcox is a great place if you want to grow your career, and you have that drive and that energy and you want to make it happen. We're going to invest in you and help you get there,” he said.

Watch the full interview with Burns & Wilcox president Danny Kaufman and HW Kaufman executive Marc Fuhrman to hear more on:

  • Burns & Wilcox’s plans to generate mid-to-high teens growth in 2024
  • How the company’s investments in technology and talent are fuelling its drive to double in size by 2028
  • The wholesale intermediary’s success in attracting capacity, especially within the personal lines segment
  • Why an elevated interest rate environment is favouring strategic buyers in M&A
  • The executives’ views on retailers attempting to capture more wholesale business