First Niagara Bank's Warren-Hoffman & Associates insurance agency has broadened its employee benefits business by buying Health Plan Administrators Inc., an agency that specializes in the smallest of small businesses.
The acquisition, announced Friday, was Warren-Hoffman's second since $1.8 billion-asset First Niagara Bank, a subsidiary of $2.7 billion-asset First Niagara Financial Group Inc., bought it in January 1999. In January of this year Warren-Hoffman purchased Allied Claim Services Inc. of Cheektowaga, N.Y., which represents insurers and self-insured employers in the investigation, settlement, and administration of workers' compensation, automobile insurance, general liability, and property claims.
The price of the Health Plan Administrators deal was not disclosed.
The seller, based in Niagara Falls, N.Y., provides group plans in the form of purchasing alliances, or pools, for companies that have as few as two employees. This arrangement lets workers choose from among several health-care and dental providers. Health Plan Administrators also provides billing and enrollment services for these employers.
Lyn Phinney, Warren-Hoffman's vice president of employee benefits and financial services, said outfits with two to 20 workers are generally not large enough to offer their employees multiple health plans.
Warren-Hoffman's clients also includes firms with as many as 2,000 employees, as well as individuals who buy personal lines.
John Wepler, senior vice president of the consulting firm Marsh Berry & Co. in Concord, Ohio, said most bank-owned insurance operations have grown by buying agencies. More of those that have made such acquisitions should augment them with efficiency deals - buy agencies in the property-casualty, group health, and third-party administration businesses, he said. Benefits administration is a headache small businesses, and ownership of Health Plan Administrators will help Warren-Hoffman serve these businesses better, Mr. Wepler said.
Health Plan Administrators will keep its name as a subsidiary of Warren-Hoffman and move to the agency's offices in Amherst, N.Y. Its founder, George McGrath, will stay on for a while as a consultant but is looking to retire soon.
Warren-Hoffman sells commercial and personal insurance lines, employee benefits, and surety bonds, and provides financial planning services. It had revenues of $16.7 million last year.
First Niagara Financial Group, a multibank holding company in Lockport, N.Y., owns two other banks in New York State - Cortland Savings Bank and Cayuga Bank - and has 36 banking offices in all.
