Some former insurance brokers at the Newport Beach office of New York-based Marsh & McLennan Cos. have left the troubled company and opened an office here for Birmingham, Ala.-based McGriff, Seibels & Williams.
The Irvine office counts 10 workers, eight of them brokers, and plans to grow to 30 people by the end of next year, said Daniel Carreras, executive vice president.
The office is the West Coast headquarters for McGriff, Seibels & Williams. The brokerage has offices in Houston, Dallas, Atlanta and Birmingham.
In February, Winston-Salem, N.C.-based BBT Corp. bought McGriff, making it the sixth largest U.S. insurance brokerage with $605 million in combined 2003 revenue.
Carreras and others left Marsh on Aug. 27 and opened the McGriff branch a week later. Carreras declined to comment on the operations of Marsh’s OC office or on legal issues facing the company.
In October, New York Attorney General Eliot Spitzer filed a civil suit charging Marsh with misleading corporate clients by faking and rigging bids for insurance contracts and favoring insurers that paid higher commissions.
“I liked McGriff’s business model and culture,” Carreras said. “We have a flat management structure. Everyone, including the chairman, is responsible for handling clients.”
At McGriff, brokers bring in clients, place insurance policies and work with clients for the life of the policy, Carreras said. Marsh and other big brokers use sales representatives to bring in business, which then is handed off to marketing groups elsewhere at the companies.
Some speculate that the “hand-off” process at brokerages is what helped lead to charges of bid-rigging and other anti-competitive activities at Marsh.
Before his days at Marsh, Carreras worked with insurers in Europe and New York, where he said he dealt with McGriff.
“It was a difficult broker to deal with,” he said. “They always tried to get the best price and coverage for their clients, which is what you’re supposed to do as a broker.”
The brokerage works with retail, real estate, construction, technology, energy and marine companies.
“Our client base includes private companies and Fortune 100 companies,” Carreras said.
McGriff plans to open offices elsewhere in California, which will report to the Irvine office, Carreras said.
“We selected Irvine as the West Coast headquarters because it’s halfway between Los Angeles and San Diego,” he said.
Legal issues at big brokerages are spurring business for McGriff in OC and elsewhere, Carreras said.
“The timing of opening the office could not have better for us,our phones have been ringing off the hook with calls from clients who want to leave their current brokers,” he said. “The investigations have raised an issue, and many companies are questioning their relationships with their brokers, even with the smaller brokerages.”
Marsh earlier this month said it was cutting 3,000 workers nationwide. Marsh officials declined to comment as to whether the OC office is laying off anyone.
