Acquisitions provide big boost for small insurance firm

Norman Lutz knows good acquisition opportunities don’t just come along every day. So when Fort Myers-based Iron Ridge Insurance Services got two such chances in the span of about eight months, the firm’s CEO didn’t hesitate.

“The goal here is to grow the company,” says Lutz, 61. “There are different ways you can do that, and one is certainly through acquisitions.”

Iron Ridge first acquired Fort Myers-based Centennial Insurance Services in December 2020. Iron Ridge had been heavily focused on insurance for architects, engineers, physicians and medical practices, and the Centennial acquisition allowed it to increase its work with condo and homeowners’ associations and religious organizations (both of which have property insurance needs).

“It was a natural fit and had a niche associated with it,” says Lutz. “And we prefer to operate within niches, to be honest with you.”

That move had some challenges, given Iron Ridge just acquired Centennial’s book of business but no employees. So when Iron Ridge got the opportunity to acquire another Southwest Florida company, Olde Florida Insurance, the fact that the firm would be able to retain Olde Florida’s employees was key. “It would have been impossible to do the acquisition without the employees who knew the business and knew the clients,” says Lutz.

'There’s an old slogan that you have to be like a duck and stay calm on the surface and paddle like the devil underneath. I didn’t make that up, but it’s true. You’ve got to stay encouraging. Being patient with people and listening is critical.’ Norman Lutz, Iron Ridge

Folding in Olde Florida’s business following the August acquisition will give Iron Ridge a bigger footprint in the personal insurance market. “[Olde Florida] had a diverse book of business and that was important to me, to diversify the income stream within the agency,” says Lutz. “It’s a good idea I think, in any growth of any business, to remain diverse….Olde Florida roughly doubled our personal lines insurance business and also added some additional association business to the books.”

Iron Ridge now has 19 employees, and Lutz says the investment the company has made in technology over the years makes it easier to get everyone on the same page. Iron Ridge began investing in what Lutz calls business agility after 2017’s Hurricane Irma showed that the company wasn’t as prepared as it thought it was. “We stumbled, and we needed to do better,” says Lutz.

Iron Ridge began working to ensure it had the technology and systems in place to allow its staff to work from anywhere, which of course proved especially prescient when the pandemic hit and remote work became a necessity. “It was much easier for us to ramp up to that because we were already going there,” says Lutz. “All those headaches that everybody has every day around technology, we were already working really hard to eliminate that loss of productivity by investing in and supporting a robust technology platform.”

Iron Ridge still has about 2,200 square feet of office space, and Lutz sees some kind of physical presence remaining in the mix as the company looks toward the future. “There’s always going to be a face-to-face experiential element for some customers,” he says. “But the percentage of them that feel that way will certainly diminish.”

Terms of the acquisitions haven’t been disclosed, and Lutz declines to disclose company revenue figures. He says the firm had been growing between 25% and 33% a year just through organic growth and client retention, and that the acquisitions of Centennial and Olde Florida each increased the firm’s size by about 33%. “It’s a lot of growth in a short amount of time, but we’ve got a great team of people,” he says.

Lutz sees staff as a big differentiator in the insurance industry, where everyone has access to similar markets and goes through the same kind of licensing. “One of the only differences you can really have is how you treat your employees and what the culture of your office is,” he says. “And I think what we’ve done here is unique.”

That includes four-day workweeks for customer service reps to provide more work-life balance and an eschewing of the standard annual employee evaluation. “We communicate with people and give them what I think of as the three-legged stool of leadership,” says Lutz. “They have to have accountability, responsibility and authority, and if they don’t have those three, they’re just going to flounder. So we work hard to make sure people have the authority and responsibility to do their jobs.”

He thinks that kind of approach helps the company both retain employees and attract acquisition partners. “This isn’t the last acquisition we’ll do,” says Lutz. Iron Ridge sees the potential for opportunities in other geographic areas of Florida, as well as in Georgia.

Lutz knows the firm is making these moves at a challenging time for the insurance industry, with things like rising property insurance rates and the unknowns following the Surfside condo collapse looming overhead. He says it requires patience and discipline to make it through, especially when working with new clients who didn’t actively choose your firm but ended up there because of an acquisition.

“There’s an old slogan that you have to be like a duck and stay calm on the surface and paddle like the devil underneath,” says Lutz. “I didn’t make that up, but it’s true. You’ve got to stay encouraging. Being patient with people and listening is critical.”