Bob Hilb is back in business and back in the CEO chair.
A former Richmond insurance professional has been named CEO of Virginia Beach-based Choice Financial Group, a fast-growing company on a corporate acquisitions process that Hilb wants to nurture and accelerate.
The new position marks Hilb’s return to a leadership role in the industry, having stepped down following his sudden exit from his flagship company Hilb Group in 2017.
“I kind of went undercover for four years,” Hilb said.
A non-compete agreement kept him out of the game for a while, until he began negotiating with other companies – which led him to Choice.
“When the non-competitor came along I opened up a little bit of communication and quickly got three or four clients and it was all over the place helping people find organizations. One of those clients was Choice.”
Hilb said he advised Choice’s founder, Richard Braun, as the company plans to acquire branches around the country, including in Richmond.
From 2019 to 2021, Choice closed 11 acquisitions and grew from $2 million in annual revenue to nearly $15 million.
Braun then struck a deal to sell Choice to private equity firm Northlane Capital Partners, a move that saw Hilb join Choice full-time to run its M&A business.
After the ink dried on the Northlane deal, Hilb said Braun was ready to step down and Hilb was asked to step in as CEO. The offer meant coming a long way, something Hilb, 59, wasn’t sure he wanted to do.
“I didn’t really want to quit my job. After the Hilb Group was sold in 2019 (to the Carlyle Group) I didn’t have to go back to work,” he said. “But I see an opportunity to finish what I started a long time ago and end my career the way I wanted.”
He took over as CEO on July 12. Choice will remain based in Virginia Beach, while Hilb will maintain an office here in Richmond. The company has about 200 employees, most of whom work in the organizations it acquired.
As he did at the Hilb Group, Hilb’s work at Choice focused on growing independent insurance companies. The Hilb Group acquired nearly 40 companies and grew to over $80 million in revenue during Hilb’s tenure. He said Choice has closed seven deals since taking on M&A in November.
He added that more deals are on the way and the goal is to get as much as $45 million a year by closing all the deals he currently has in the works.
“Do I think we can get Choice to $300 million to $500 million (annual revenue)? Absolutely,” Hilb said.
However, the competition to buy is tougher today than it was when Hilb founded the Hilb Group 12 years ago. Businesses of all kinds have entered the insurance business, keeping demand and prices rising steadily despite the pandemic.
“It’s a very different market,” Hilb said. “In 2010, there were 300 deals per year that were taking place. Today there are 30-plus private loan brokers. There were 800 to 1,000 deals done last year. It’s a retail market unlike anything I’ve ever seen.”
Hilb said Choice’s competitive advantage is that investors can jump in early and take a portion of their earnings in Choice’s ownership shares before the next dividend payment.
“The special equation tends to be based on what they know if they have good leadership, every three to four years they’ll get three or four times that return,” Hilb said.
He said he learned from Hilb’s team, although he still regrets it.
“I look back on that time now and the growth that came from that experience is something I’m very grateful for. But at that time it was difficult,” he said. “It wasn’t a good ending.”
He said his move to Choice should not be seen as an attempt to create a Hilb 2.0 team.
“You can look at it that way, but I don’t. Hilb Group is a large company. They are a good business. A total of $500 million. “
However, he admits that there are mixed feelings about seeing his name still on top of what is now his main competition.
“Yeah, it’s a little weird. I will not lie to you,” he said.
But there is also pride that the family name still flies on the flag. He founded the Hilb Group after working for his late father’s company, Hilb, Rogal, & Hobbs (HRH), before it was bought for $2 billion in 2008. He said his late father was always upset that the family name was not there when HRH was sold.
“When I founded the Hilb Group, one of my goals was to restore the Hilb brand to the industry,” he said. “So we really made it.”