Everything is big in Texas. And indeed Wortham Insurance & Risk Management, based in Houston, is the biggest private insurance brokerage in the Lone Star State and the largest privately held insurance partnership in the country.
But the company keeps more to the tall, silent prototype. In January, Bob Hixon became only the fourth chairman in the company's 91-year history, succeeding Fred C. Burns, who became chairman emeritus.
Late in August, the company completed its second acquisition this year, capping a buying and building effort that began in 2006. With his desks mostly cleared for the moment, Hixon took some time to talk about his new role and where his company is headed.
"Being based here in the energy capital of the world, we have a significant penetration of the sector, upstream, midstream and downstream, and also in power," Hixon said. "But we are also a significant player in healthcare. We also have a national practice in lawyer's liability insurance and a significant practice in food service, both wholesale and retail." Wortham boasts a client retention rate in excess of 95 percent.
Until 2000, all of Wortham's focus was on building its business in its main sectors and within the Houston area. Since then, new offices have been opened around the state: San Antonio, Austin, Fort Worth and Dallas. Most have been by acquisition, or "merger" as Hixon prefers to say, but the office in Dallas was an organic expansion.
From there the urge to merge continued. Late in August, Wortham completed its second small acquisition in Dallas, a firm called AGA of Texas. That was also the second acquisition this year, the first being Crosby, Bigelow & Fitzgerald of San Antonio.
Shifting gears, Wortham will now focus more on integration than on acquisition. "We are putting systems and processes into place statewide for all of the offices to function more efficiently," said Hixon. "Also, we have always been quite comfortable soliciting and managing risk. In contrast, the firms that we have acquired were primarily middle-market operations. We are now moving to elevate those to solicit and create risk management. But at the same time, we are learning a lot from them on how to better manage our middle-market accounts."
Hixon himself represents a change in style at the top of the venerable brokerage. "I am much more of a delegator," he said. "I don't want to be just an administrator, I want to continue to be a broker. That is why even as chairman I am still the guy heading the team handling the Kellogg Brown & Root account, and I have other long-term clients. And that is a bit of a change." Hixon started with Wortham in 1973. He holds a bachelor's degree from Williams College in Williamstown, Mass., and an M.B.A. from the University of Houston.
To help him accomplish both his brokerage and his administrative duties, Hixon has promoted two new vice chairmen. Richard Blades will manage the account executives and sales as well as external affairs, while Randy Schuler will be primarily responsible for the healthcare sector and the Dallas office. The two existing vice chairmen will continue in their duties. Charles Flournoy handles operations and financial management, while Peter Pincoffs runs the office in Austin and is responsible for coordinating all of the five branches with the home office.
Hixon's plan is for Wortham to grow both by acquiring new clients, as well as increasing its share of business with existing clients from the current network of offices. "We can penetrate the valley down to McAllen and Brownsville out of San Antonio, and also the Permian Basin/West Texas area of Midland, Odessa and El Paso from Austin and Dallas," he said. "But I would not rule out any further acquisition."
He does not foresee expanding outside the Lone Star State, though. "We have long-term friends in the legislature and in the state insurance department. Texas is a major market, and we are dominant in this market. We have plenty to do right here."
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October 1, 2007
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