How Higginbotham grew from a small Fort Worth insurance broker to an industry giant
Rusty Reid is on the phone so often, his employees jokingly refer to his car as his office garage.
No matter if it’s a call from a client or an employee, he answers. His hands-on approach is just one part of how Reid, the chairman and CEO of Higginbotham, has transformed the Fort Worth-based insurance brokerage into one of the industry’s biggest names.
For most of its 76-year history, the firm founded by Paul C. Higginbotham was a small, local provider of personal insurance. Reid was one of only 12 employees when he joined the company over three decades ago.
Today, Higginbotham is the nation’s 20th largest independent insurance brokerage by revenue. It has more than 3,400 employees across its 131 offices in 17 states — and continues to expand at an impressively fast clip, including two acquisitions announced just this month. While the private company doesn’t disclose numbers, an industry publication reported recently it was estimated to be worth more than $4 billion.
Higginbotham’s meteoric growth wasn’t always by design — but its success under Reid’s leadership wasn’t by chance, either.
A young CEO
When Reid joined the firm in 1986, the company was led by William Stroud, who was Higginbotham’s nephew. Stroud took Reid under his wing, becoming a mentor and father figure. When Stroud retired in 1989, Reid succeeded him as CEO at only age 27.
By then, the firm had grown to 24 employees. Almost immediately, Reid introduced an employee stock ownership plan to give employees equity in the company, which he knew would help with retention.
“If I got people that had built this firm thus far, then built the firm prospectively with me, I wanted them to earn above and beyond a paycheck, hence this equity ownership” Reid said.
The company is still employee-owned today. Reid said about 3,100 of Higginbotham’s roughly 3,400 employees participate in the company’s synthetic equity plan. About 1,500 employees own shares in Higginbotham directly, according to Reid.
‘A great partner’
Now in his 35th year leading the company, Reid said Higginbotham’s values are an integral part of its success.
“We’re kind of all about the people we take care of, hence our clients, or carrier partners, our communities. When we do that, well, it takes really good care of us,” Reid said.
Shortly after becoming CEO, Reid and his colleagues created the secret sauce of Higginbotham’s business model — a single-source model that made the company a one-stop-shop for an array of services integral to business or personal finances.
Today, Higginbotham is licensed by the Texas Department of Insurance as a managing general agency, surplus lines agency, risk manager agency, third-party administrator and general lines agency (for health and HMO, life, accident and property and casualty coverage).
Higginbotham offers personal insurance and a range of financial services, including wealth management. Corporate clients can get business insurance, employee benefits programs and human resources services.
Whit Perryman has been a Higginbotham client for roughly 30 years. He is CEO of Irving-based Vermeer Texas-Louisiana, a heavy-equipment distributor with 15 locations, and says it can be difficult to find insurance for all of them — particularly in coastal areas. Despite the challenges, he said, Higginbotham has always found him coverage.
A business like Vermeer Texas-Louisiana needs a variety of policies and employee services. Through Higginbotham, the company insures physical locations, gets medical insurance for employees and has some business insurance.
Reid was an account manager for Vermeer Texas-Louisiana when Perryman first met him. Perryman said Higginbotham has maintained a strong relationship with clients throughout its rapid expansion.
When Perryman’s company was experiencing some financial difficulties in the early 2000s, Higginbotham worked with it to adapt coverage. Perryman said he knows that key people on his account will always answer the phone, even when natural disasters strike.
“They were a great partner,” Perryman said.
From insurer next door, to industry powerhouse
By 2007, Higginbotham was one of the largest insurance firms in Texas. Reid said he received offers to buy Higginbotham, but he didn’t want to sell the successful, relatively young company. Instead, the firm changed its strategy.
In the late 2000s, Higginbotham began developing what Reid calls a “dual-growth strategy.” The company kept working to retain clients and find new customers, but also began acquiring other companies across the country. Higginbotham has acquired, merged or partnered with over 87 firms since 2000. More than half of those companies were acquired in the past four years.
Higginbotham was among the country’s 28 most active acquiring insurance brokers in 2023, according to The Hales Report, a publication of the industry advising firm Dowling Hales.
The acquisitions run the gamut of professional services and insurance specialties, including human resources and employee benefits.
Reid said the company first focused on growing its presence across the South. Now it is expanding into regions with similar insurance relationships, including the Midwest.
A future IPO from the insurance titan is unlikely; Reid said the company has no interest in going public.
“I think sometimes you become something different when you become a public enterprise, and we don’t want to become something different,” Reid said. “We love, love who we are.”
Reid declined to share Higginbotham’s current valuation. A 2014 Securities and Exchange Commission filing estimated the company’s value at the time to be over $100 million.
Stone Point Capital, a private equity firm, has owned a minority stake in Higginbotham since 2009. Reid said Stone Point helps the company with capital markets and has been a great partner.
A recent transaction between Stone Point Capital and global asset management titan Blackstone suggested Higginbotham’s value is over $4 billion, according to trade publication Insurance Insider US. Blackstone purchased a minority stake in Higginbotham in early July.
Blackstone and Stone Point Capital declined to comment on the deal.
‘We’re Texans, we’re born and raised here’
Higginbotham made headlines in 2023 when the company bid $440,000 to win Snoop Dog, the grand champion steer at the Fort Worth Stock Show & Rodeo — smashing the previous record of $310,000.
The bid was made through Higginbotham’s community fund, which supports local nonprofits and charities. Employees contribute to the fund and suggest where to donate. Since its inception in 2011, the fund has raised almost $11 million.
Reid said the steer purchase, which goes toward entirely toward a young 4-H student’s college education, stemmed from wanting to do something special to celebrate Higginbotham’s 75th anniversary.
Higginbotham won the Stock Show’s champion steer again this year, paying $340,000. Reid said he isn’t sure whether Higginbotham will go for the grand champion in 2025, but the company will continue to support the Stock Show’s mission of educating youth in the livestock industry.
“We’re Texans, we’re born and raised here, and that Stock Show is really a great view of what we do in our city that I think makes us culturally unique and different,” Reid said.
Higginbotham, along with Vermeer Texas-Louisiana and Hillwood, annually provide homes to wounded veterans through the Charles Schwab Challenge Military Home Donation program. The program has donated homes each year since 2011.
‘It’s something that (Reid) and I talk about,” Perryman said. “We’re doing this every year, as long as we’re alive. Let’s keep on doing this, it’s fun.”
‘We don’t think our work is done’
Reid said Higginbotham’s growth hasn’t changed how the company operates. The size of the firm doesn’t stop him from looking for the best experts and trying new ways of doing things.
“I think if you really kind of build your business around values that are important to your constituencies, then how large you get as an organization really won’t matter, because that becomes your guiding light of what you want to do,” Reid said.
Reid believes it’s important to support young talent. He created the chairman’s council, a group of employees he mentors and believes could be future leaders.
Reid said there are still opportunities for Higginbotham to grow in Texas. For now, the company is expanding to new markets across the country.
In August alone, the company announced new acquisitions with Turner & Associates Insurance in Georgia, where Higginbotham already has 10 offices, and with Tampa-based Cassidy & Company, which serves high-net worth clients with estate planning and custom life insurance strategies. Both partnerships strengthen Higginbotham’s footprint in the Southeast.
“We don’t think our work is done,” Reid said.
This story was originally published August 29, 2024 at 10:02 AM.
CORRECTION: This story has been updated to correct the current number of Higginbotham offices across the country, and how much the company’s community fund has raised.
