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Cost Benefit

Regions Insurance buys Argyle, expands employee benefits division.

photograph by Otnaydur | Dreamstime

Receiving employee benefits makes working long hours on the job less burdensome and a tad bit more delightful.

Regions Insurance, an affiliate of Birmingham, Alabama-based Regions Financial Corp., understands the aforementioned claim all too well.

For decades, the company has helped businesses provide their workers with better benefits services by contributing guidance on redesigning employee benefits plans; creating ideas on how establishments can solve human resource issues; and through cultivating innovative employee-training programs.

The company recently brought its business to the Bluff City with the purchase of Argyle Benefits Consultants. The expansion took effect this past January.

Prior to the purchase, Argyle held a presence in Memphis for 20 years as one of its most respected employee benefits firms.

Philip Johnson, founding partner of Argyle, joined Regions Insurance along with six other employees, after the purchase. Through the acquisition of Argyle, he says Regions Insurance is adding several resources that will contribute to the expansion of its employee benefits services.

“Acquisitions is one way to grow your business, but the other way is organically through new sales and new business opportunities,” Johnson says. “There are some differentiators that we bring to the table, that we feel are very appealing to businesses as they make a decision on what products and services they’re going to use. For example, on the benefits side, we handle the evaluation and recommendations for medical insurance programs, dental insurance programs, life disability, and retirement programs for businesses. And as we go through the evaluation for the needs, we make our determination for the recommendations that will be made to that employer.”

In addition to the aforementioned services, Johnson identified wellness and human resource advisory, and benefits communications as benefits that sparked Regions’ interest in Argyle. He considers joining forces with Regions Insurance a great platform to provide benefits services on a larger scale.

“As a large benefits advisory firm, we have the ability to provide those services as part of our standard package,” he says. “Whereas, typically with an organization like Argyle, we didn’t have the capitol resources to invest in those types of things. But with a large organization, you may have access to resources that allow you to provide services and capabilities that would not ordinarily be available through smaller brokers.”

Nationally, Regions Insurance is ranked among the 25 largest insurance brokers, and it is the fifth-largest broker based in the Southeast.

In addition to purchasing Argyle, Regions completed the sell of its Morgan Keegan & Co. brokerage unit to Raymond James Financial for approximately $1.2 billion. The money will help the company repay a $3.5 billion tab it owes the U.S. government for Troubled Asset Relief Program (TARP) funding it received in 2008.

The correlation might be made that the large amount of revenue acquired by Regions after selling Morgan Keegan made it possible for the company to purchase Argyle. However, Johnson says that’s not the case.

It’s not even remotely related,” he says.

The Argyle acquisition isn’t the only measure of growth the company has posted recently. In 2012, Regions Insurance opened its first office in Atlanta and also purchased Story Capital Group, an insurance and employee benefits firm in Nashville.

Johnson says some trends in the industry persuaded Regions Insurance to invest in employee benefit services more frequently.

“The reality is that healthcare reform organization has put a spotlight on all things benefits related, not just healthcare insurance,” he says. “There are going to be fewer and fewer small employee benefits operations. There are so many changes going on relative to the healthcare reform legislation that there may be losses in revenues, access to markets, and clients who make collections to go to the insurance exchanges.”

Looking toward the future, Johnson says Regions Insurance plans to continue to evaluate other opportunities for acquisitions and also make a concerted effort to expand and continue to grow organically through the physical sale of its products and services to the general marketplace.

 

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