Regions Financial Corporation RF is keen on expanding its insurance business in Georgia. The company’s subsidiary, Regions Insurance, Inc., announced its plans to acquire the Georgia-based The A.I Group, Inc on Monday.
The A.I Group provides insurance brokerage and employee benefits consulting services to mid-sized and large employers throughout the U.S., with offices in Greater Atlanta and Athens.
Per the announcement, managing partners at A.I Group, Dave Woodruff and Dan Murphy, along with 39 other associates, have joined Regions Insurance. Further, both Woodruff and Murphy will facilitate the planned integration, and thereafter play key roles in employee benefits operations of the new entity.
Regions Insurance is on an expansion mode. After opening its first office in Atlanta back in Nov 2012, the company forayed into South Carolina in Sep 2013. Over the past 18 months, the company has opened 4 new offices in St. Petersburg, Dallas, New Orleans and Athens, and expanded benefits operations in Memphis and Nashville.
With the acquisition of A.I Group, Regions Insurance will have more than 100 associates with expertise in the employee benefit, property, casualty and captive insurance space. We expect the acquisition to boost Regions Insurance’s, and in extension, Regions Financial’s growth, as A.I Group is among the largest benefits consulting firms in the Southeast region.
Besides, the insurance industry itself looks promising. With the domestic economy gaining stability, the pricing structures in the industry are also expected to improve. Moreover, GDP growth is likely to aid revenue growth, payrolls, and property values, which will contribute to insurance premiums. Further, with an interest rate hike right around the corner, the industry will likely see improved premiums.
Amid pressure on revenues and stringent regulatory scrutiny within the banking industry, many financial institutions are looking for alternative sources of revenues. As such, the moderately regulated insurance industry serves as a sweeter option.
California-based Wells Fargo & Company WFC is also looking to grow its insurance business. The company has recruited more than 50 officials to its insurance division in the last few months. Notably, the division contributes roughly 4% to the company’s non-interest revenues (Read: Wells Fargo (WFC) Seeking to Expand Insurance Presence?)
Regions Financial currently carries a Zacks Rank #3 (Hold). Better-ranked southeast bank stocks include Fidelity Southern Corporation LION and First Bancshares Inc. FBMS. Both stocks sport a Zacks Rank #1 (Strong Buy).
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