Old Kent Insurance Group is not done buying agencies and may expand outside its home state of Michigan, an executive said.
The Old Kent Financial Corp. subsidiary just completed its fourth agency acquisition since 1995 and first since September 1997. All those were in western Michigan, but now the Grand Rapids company is "actively looking to either buy an agency or set up shop" in Illinois, Indiana, or eastern Michigan, Albert Potas, senior vice president for investor relations at Old Kent Financial, said Monday. He would not say when either of these things would happen.
Old Kent has 285 bank branches in Michigan, Illinois, and Indiana but has no insurance presence in Illinois, Indiana, or eastern Michigan. Its purchase of Kehoe-Nedrud Agency Inc., which was announced Monday, was its first in the Kalamazoo metropolitan area. Its previous agency acquisitions were in Traverse City and Grand Rapids.
Kehoe-Nedrud, which had premium volume of $7 million in 1999, sells personal, commercial property, casualty, and life insurance, as well as employee benefits. It now has its new owner's name, and its president, Melody Nedrud, is now Old Kent Insurance's manager for southwest Michigan.
Old Kent Insurance Group is the 57th-largest U.S. insurance broker, with $23 million of commission revenue. Its $21 billion-asset parent started the unit after it bought Guyot-Hicks-Anderson & Associates of Traverse City in 1995. It bought the Grand Rapids-based Poggi & Associates commercial insurance agency consortium and, in September 1997, Grand Rapids Holland Insurance Agency.
Some observers said it has yet to be proven that buying insurance agencies is a good idea for banks.
"We haven't seen what it does to their bottom line," said Kenneth Kehrer, president of Kenneth Kehrer Associates of Princeton, N.J. He also said it is too soon to tell whether banks are overpaying in such deals.
Old Kent did not say what it spent on Kehoe-Nedrud.