A membership organization of brokerages established in 2002 is focused on proving that independents can scale themselves to be the “player of choice” in the North American M&A market, even when pitted against much larger entities.
“We wanted to take lessons from other broker groups to create one that we that thought would be better, and if you flash forward to today, there is no doubt that CBN is the preeminent broker group in Canada,” said Bruce Rabik, co-founder of Canadian Broker Network and chief operating officer at Rogers Insurance.
Part of what makes CBN successful, Rabik argues, is the level of trust that each of its members commits to the organization. CBN operates under a model where full disclosure drives strategic collaboration.
“The biggest component of CBN has been the information sharing,” he said. “We do financial benchmarking, which is fairly unique among broker groups, and we also share income statement and balance sheet information, so we all have intimate knowledge of each other’s operations.”
As a result, brokers are able to see how their businesses fare in relation to peer organizations, and discuss ways to address any weaknesses that may have arisen.
“If one of our fellow members has a lower expense line in a certain category, discussions will be made about how they are saving money there. We also look at each other’s growth rates and explore why someone may be growing faster than the rest of the group,” he said.
The result of this cooperation is a powerhouse organization that’s able to compete with much bigger rivals. He points to CBN’s investment in Bullfrog Insurance, Canada’s first exclusively online commercial brokerage, as well as its purchase of the rapidly growing MGA
South Western Group, as evidence of this.
In addition, Rabik feels that these transactions are mutually advantageous, as they allow target organizations to feel secure in knowing that their brand and reputation will be upheld after the merger.
As a group that writes $800 million in premiums collectively, however, he argues that CBN provides that peace of mind, as well as potential for multiyear sustained growth.
“With all the frenzy going on out there with M&As, CBN is extremely well-placed to be the player of choice in terms of who’s buying brokerages,” he said.
