In early June, Force financière Excel bought Agence Gilles Gadoua from AXA Insurance and Financial Services. With the deal, Excel gains an additional volume of $3 million in life insurance premiums.
James McMahon, Excel CEO, told The Insurance and Investment Journal that as part of this move, the Sherbrooke-based managing general agency plans to add 440 advisors to its roster of 1400 representatives.
The transaction amount was not disclosed. AXA, which wholly owned Gadoua, is giving up its entire financial stake in the company.
Mr. McMahon says that this transaction confirms Force financière Excel's status as the largest financial services firm in Quebec, "both in terms of business volume and the number of advisors and scope of territory covered." The company is also accentuating its presence in the Montreal area, he continues.
Mr. McMahon emphasizes that this acquisition will not be Excel's last. "Our expansion strategy has always been to buy firms or blocks of business. It's our twelfth since Excel was founded in 1981. For an MGA, that's a lot. On top of that, it was important for us to acquire Gadoua, which has always shared our values. The two firms are very similar."
AXA has always enjoyed preferred relations with Excel since it became the company's first purely independent MGA in 2005. Even if the transaction does not bring Excel any additional suppliers or niches, it reinforces its position. "It consolidates our production volumes with insurers. It was also important for Excel to acquire a seasoned distribution network. We aim to integrate all the advisors and offer them all our products and services."
Robert Bazinet will continue to head Gadoua's operations, Mr. McMahon says. "One thing is certain: we'll keep the operations going and assess how to optimize them in the coming months."
Seven of 21 Agence Gadoua employees have been retained by Excel. Some others were offered positions at AXA or other companies. Agence Gadoua will be moved to Excel's sales office in Brossard. The firm is expected to be fully integrated into Excel by Sept. 1.
AXA says it sold Gadoua because keeping it simply was not in its strategic interest. Gadoua initially offered an alternative to independent advisors in the semi-captive distribution network, Robert Landry, Executive Vice President, life insurance and financial services at AXA told The Insurance and Investment Journal.
"It was the last stage of the reorganization we started five years ago. We changed our distribution model at that time because it wasn't efficient. We bought firms from former regional directors and opened our distribution to independent MGAs. In that context, it was pointless to own Gadoua, which would mean competing with our other MGAs," Mr. Landry explains.