Baldwin Group at 45th Annual William Blair: Strategic Growth Insights

On Tuesday, 03 June 2025, Baldwin Group (NYSE:BRP) presented at the 45th Annual William Blair Growth Stock Conference. The company highlighted its impressive expansion from a local Florida broker to a national entity with a vertically integrated insurance value chain. While the company boasts strong growth metrics, it also faces the challenge of achieving peer-level margins.

Key Takeaways

• Baldwin Group’s organic growth is at least two times greater than industry peers.
• The company aims for $3 billion in revenue and a 30% adjusted EBITDA margin within five years.
• Baldwin’s integrated technology platform differentiates it from other acquisitive brokers.
• The company has completed 35 acquisitions since its IPO, acquiring $530 million in revenue.
• Baldwin is strategically positioned to capitalize on the underserved personal insurance market.

Financial Results

• Adjusted Diluted EPS Growth: Nearly 40% CAGR since IPO in 2019.
• Adjusted EBITDA Margin: Currently at 22-23%, with a target of 30% in the next five years.
• Revenue Target: $3 billion within five years as part of the "3B30" plan.
• M&A Activity: Completed 35 partnerships, acquiring $530 million in revenue.
• Free Cash Flow: Improved conversion expected due to reduced earn-out obligations and stable interest costs.

Operational Updates

• Segment Breakdown: Insurance Advisory Solutions (IES) represents 48% of total revenue.
• Organic Growth: Consistently at least double the industry average; Main Street segment growing at 20% annually.
• Underwriting Capacity and Technology: Grew from $60 million in premiums in 2019 to over $1 billion today.
• Main Street Insurance: Captures 55% of new homes sold by partnered homebuilders, targeting a $10 billion market.

Future Outlook

• Growth Strategy: Focus on organic growth and re-engaging in M&A as financials improve.
• Margin Expansion: Aiming for peer-level or better adjusted EBITDA margin over the next 5-10 years.
• Embedded Personal Insurance: Positioning as a leader in embedded personal insurance solutions.
• Competitive Advantage: Prioritizing quality acquisitions for unique capabilities and expertise.

Q&A Highlights

• Homeowners Insurance Market: Addressing the distressed market with proprietary and third-party products.
• Technology in Brokerage: Differentiation through a fully integrated platform, enabling cross-selling and better negotiations.

For further details, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Adam, Runs Insurance Practice: I run our insurance practice here. I think the disclaimers if you look disclaimers on our website, you’ll see disclaimers. Got gotta say that. But we have CEO, Trevor Baldwin, and CFO, Brett Hale of Baldwin. I’ll just say two two words on it and then turn over to those guys that if you guys haven’t been following Baldwin, there are you know, I probably would’ve said a couple years ago up and coming, but they’re way too big to be up and up and coming right now.

But they built a a, what I’ll call, really cool insurance brokerage. You know, on the surface, it may look like some of the other brokers, but they built, you know, some really nice franchises, you know, employing some, you know, I’d say, more forward technology in those franchises. And, you know, I think it is a different model than some of the, you know, some of the very, very good classic brokerage that we’ve seen in the past. So with that, Trevor, if you wanna talk about it, that’d be great.

Trevor Baldwin, Cofounder and CEO, Baldwin Group: Yeah. Thank you, Adam, and good morning. I’m Trevor Baldwin, cofounder and CEO here at the Baldwin Group. See if we can get this clicker to work. Does that work?

Alright. Doesn’t seem to be working. Maybe if you’ll just advance the slide. Yeah. Alright.

One more slide. Great. So the Baldwin Group is a fast growing insurance, sales, distribution, and services business. From our roots in the early twenty tens, we’ve rapidly scaled from a local Florida centric retail insurance broker into a national platform vertically integrated across the insurance value chain. Importantly, we’ve been able to grow and scale our business organically at a rate that is at least two x that of our industry peers each and every year that that we’ve been growing the business, And we’ve invested thoughtfully in building out many of the capabilities to build the vertically integrated insurance platform of the future.

Since inception and really starting in the early twenty tens, we scaled from our roots as that local retail insurance broker into a regional platform. We acquired our MGA business, MSI, which was a critical step in our journey to vertically integrating into the insurance value chain, and we thoughtfully built out our capabilities across middle market retail broking, incline industry sectors, and product expertise. We launched our nascent embedded personal insurance strategy in Florida in the early twenty tens in partnership with the developer of The Villages, which today, through a combination of organic growth and m and a, has scaled into one of the leading embedded personal insurance franchises in the country. We went public in October of twenty nineteen. At the time, we’re roughly a hundred and $50,000,000 of revenue with approximately 400 colleagues and a regional footprint.

Since then, we’ve completed 35 partnerships, our nomenclature for acquisitions, acquiring roughly 530,000,000 of revenue. We expanded our franchise nationally across The US, investing deeply in in client industry and product capabilities. We’ve invested in building scale in each of our three core operating groups, and we’ve continued to invest deeply in our vision of building the vertically integrated insurance platform of the future and our and our strategy around building the embed home personal insurance embedded franchise of the future. Looking forward, we’re incredibly excited about how our business is positioned, the momentum we have in each of our core segments, and how that enables our unique competitive advantages to continue to rapidly scale while building margin accretion and continuing to accomplish our goals across the insurance value chain. If you look at each of our three operating segments, we have our IES business, which today represents approximately 48% of our total revenue.

This is where we provide middle market retail insurance broking services to midsize and large clients. In this business, we have a national footprint. We have invested in a fully integrated platform operating off of a single technology stack that enables us to have a common go to market strategy, a common way in which our systems and we work with our clients, and ultimately enables us to deliver organic growth that is at least one and a half times that of our industry peers over time, largely driven by our success and new business generation or sales velocity. In our underwriting capacity and technology solutions segment, this is where we vertically integrate ourselves into the insurance value chain. We build our own proprietary insurance products.

We source third party risk capital to stand behind those products. And through our retail businesses, embedded distribution channels, as well as unique specialty distribution outlets, we’re able to distribute those products thoughtfully, rapidly scaling while managing loss ratios to industry leading results. Our main street insurance segment is where we’re we are innovating the way in which personal insurance is distributed. We are a leading embedded personal insurance franchise and attacking a market that has a massive TAM that has historically been underserved by the broker channel. We’ll get into more details around that later in the presentation.

As I mentioned, our organic growth has consistently been at two times or greater that of the industry peers. And what you’ll see here highlights the fact that our organ outsized organic growth is largely driven by internally controlled new business generation rather than third party market rate and exposure or renewal premium change. This is as a result of how we’ve curated and crafted our platform to enable us to consistently go out and take market share, win new clients, and drive new business generation that ultimately propels a consistently outsized organic growth profile through both insurance market and economic cycles. Additionally, as we have grown the business and and and created scale, we have immense operating leverage in our underlying profitability and adjusted EBITDA. As you can see here today, our business at a 22, 20 three percent adjusted EBITDA margin operates meaningfully below that of our peers.

But, structurally, there’s nothing different around how our business operates and executes that should preclude us from being able to achieve peer level or greater margin over time. In fact, last year, we rolled out our latest five year strategic objective, which is 3,000,000,000 3 b 33,000,000,000 of revenue, 30% adjusted EBITDA margin achieved over five years. This is something we remain incredibly focused on and feel good about our path to continuing to execute on delivering outsized organic growth, continued consistent margin accretion year in and year out, ultimately, will enable us to deliver superior overall financial results over the intermediate to long term. Diving a little bit deeper into each of our segments, in our IS business, as I mentioned, we’ve built a fully integrated platform with a common go to market that enables us to consistently execute on our sales strategy generating industry leading new business results, which sustainably and durably propels our outsized organic growth rate in this business. You can see here, as we bring risk advisers, our nomenclature for insurance sales professional onto our platform, we are able to quickly ramp them into generating new business that is multiples of what the industry on average is able to generate.

This is the defining bedrock of how this part of our business consistently drives outsized new business results through the cycle. And when coupled with deep expertise around in client industry sectors and risk products, enables us to deliver a consistent client experience driving industry, you know, industry average or better client retention with industry leading new business results. In our underwriting capacity and technology segment, we have been busy vertically integrating into the insurance value chain, building proprietary insurance products that enable us to uniquely serve particular in client markets as well as building and deepening moats around our our retail segments through access to these proprietary products that we’re building and rolling out. Importantly, we source third party risk capital to stand behind these products, And so we operate as an MGA underwriting the risk, issuing the policies, adjudicating the claims, but not taking the balance sheet risk behind the products. That is third party traditional reinsurance capital as well as alternative capital providers.

Since we acquired our MGA platform in 2019, we’ve transformed that business from a single product MGA with 60,000,000 of premium and roughly 20 professionals to today over 20 products, over a billion dollars of gross written premium, nearly 800 professionals, and we’ve scaled that business by over 14 x since acquiring the platform in 2019. We continue to remain incredibly bullish and excited about the opportunity here to further vertically integrate ourselves into the value chain, building products that meet the unique needs of our end client markets while bolstering our competitive advantage and unique modes through access to these proprietary capabilities. In our main street segment, we are innovating the way in which personal insurance is distributed and consumed. We are the leading purveyor of home insurance at point of new home sales via our Westwood franchise, where we are the exclusive channel partner for more than 70% of the top 25 homebuilders in the country. Additionally, we’ve been investing deeply into leveraging these capabilities into the mortgage channel to be able to capitalize on a massive market that has been historically underpenetrated by the traditional brokerage channel.

To put some some specifics around what that looks like, Based on 2023 statutory data, The US personal lines insurance marketplace was nearly $500,000,000,000 of direct written premium. Based on industry estimates, we believe roughly 65% of that marketplace today goes through direct writers and the legacy captive writers like a State Farm, Allstate, and and not the traditional independent agency brokerage channel, which only captures roughly 35%. But when you think about how we’re going to market, rather than going out and looking to sell insurance one policy at a time, securing leads through traditional referral sources, we are partnering with homebuilders, mortgage providers, real estate businesses to provide a seamless, integrated, technology driven experience that makes the insurance part of that transaction, which is a secondary tran insurance is the secondary part of that transaction, seamless. We deliver an experience characterized by speed, certainty of execution that ultimate that also provides our end client with a shopping experience that provides confidence that we’ve adequately canvassed the marketplace to give them the right coverage at a competitive price. What does that mean?

That means through these channels, we believe over time, you’ll we will have access to up to $10,000,000,000 of annual home insurance premium through the transactions occurring naturally in the new home building and mortgage channels. Today, with the home builders that we’re integrated with, our capture rate is roughly 55% of the new homes that they sell. This is a massive market that we believe will be undergoing a transformation in the way in which insurance is consumed and sold, and we’re positioning ourselves to be a leader in the personal insurance embedded strategy. Additionally, and as I mentioned earlier, we have a track record of executing on m and a in a highly accretive manner. Since our IPO, we’ve completed roughly 35 partnerships, our nomenclature for an acquisition.

Importantly, our strategy has traditionally been somewhat unique and distinct from that of our highly acquisitive peers. For us, it’s about quality, not quantity. And so what you’ll see here is on average, we do far fewer transactions than that of our most acquisitive peers. We’re focused on identifying businesses that bring unique capabilities, expertise, geographic representation deals to generate superior shareholder returns over time. And as you can see in the bottom right hand of this slide, so far that we’ve been able to consistently execute on that strategy, buying down our multiple significantly despite meaningful earn out incentives during that time period, ultimately delivering fantastic shareholder returns while bolstering our capabilities and ability to execute for clients at a very high level.

Brett Hale, CFO, Baldwin Group: We have a wonderful track record of strong financial performance. We’re incredibly proud of that performance since our IPO in 2019. You can see from an adjusted diluted EPS perspective, we’ve grown that nearly 40% CAGR, over that time period. And I think one one element to point out on this slide, which has been a slight criticism of us in the past, is that the margin hasn’t seen a similar type expansion. But you can see we really bent the curve there starting in 2022, which is aligned with the message we’ve been giving to the market on the margin expansion opportunity we see in the business through operating leverage as we came through a pretty significant super cycle of investments in the 2022 period as well as significant integration cost that now we’re benefiting from.

So you can see we’ve started to bend that curve, and to Trevor’s point, you know, have pretty lofty goals over the next five years under that three b 30 plan. This, you know, this slide is is really meant to indicate that it’s an exciting time to be at Baldwin. You know, we have not done any partnerships in the last three years. We have largely been focused on, the balance sheet and strengthening a balance sheet, in the wake of, you know, a a pretty high leverage in the high fives post the Westwood transaction in 2022, and that was in the face of pretty substantial increases, in interest rates as we all know. But now, you know, you can see in the bottom left of this chart the expectation in terms of the amount of our cash flow that’s going to have to go to earn outs, drops significantly.

We’ve been talking about this as the inflection point for about a year now, and and we are at that inflection point, which is, as I said, incredibly exciting. That’s coming at a time in which our interest cost from a dollar’s perspective is flattening out, you know, yet to be seen on what rates actually do. But, certainly, as a total percentage of EBITDA, that’s coming to our benefit, and that is yielding better free cash flow conversion coupled with the margin expansion we talked about and the goals of getting to that 30% margin. So we see this as as as reaching having reached that inflection point where the free cash flow profile of this business changes pretty dramatically, and we’re able to put that free cash flow to work to, you know, maximize shareholder returns.

Trevor Baldwin, Cofounder and CEO, Baldwin Group: So as we think about our path forward, we’re incredibly excited about how our business is positioned. We’ve scaled from a regional platform five years ago at the time of our IPO to a national platform with scale across all three of our operating segments. We have a leading position in the embedded personal insurance strategy through our Main Street segment. We continue to rapidly scale through the launch of new products and continued scaling of our existing products in our underwriting capacity and technology segment. In in our insurance advisory solutions business, we continue to have a leading franchise recognized for being the premier home for the industry’s top professionals to come build the most meaningful careers and have the most significant impact for their clients.

All of that, when combined together, will enable us to continue to deliver outsized organic growth, deliver consistently accretive margin year in and year out for the foreseeable future, and begin to turn back on m and a as our our financial profile improves, our free cash flow inflects, making available for ourselves another level lever for value creation. We feel really good about how the business is positioned and what the future looks like for for us to continue to execute across these key strategies. Importantly, though, you don’t have to believe that we’re gonna accomplish anything remarkable over the next five years for this opportunity, our business, to generate significant shareholder return. If we can continue to just grow organically at the low end of our long term range of 10% to 15% while achieving our goals of delivering peer level or better margin over the next five to ten years and executing on our goal of three b 30 in the next five, then the growth in top and bottom line will be significant. We feel really good about how we’re positioned to execute on that strategy and look forward to the not too distant future where our financial profile enables us to thoughtfully lean back into m and a in a manner that will also add another opportunity for accretive value creation.

Adam, Runs Insurance Practice: Great. Thank you, Trevor. We do have some time for questions. Any any questions from the audience? I I will kick off then.

The one market that’s really in distress in The US is the homeowners insurance market. All you have to do is, you know, watch TV, you know, you see the hurricanes, the fires, the convex storms, Midwest actually. A lot of hailstorms, a lot of convex storms. So that market has traditionally been almost controlled by the the big state farm farmers nationwide’s contrast. Why can you help the consumer today where those big behemoths are really struggling?

Trevor Baldwin, Cofounder and CEO, Baldwin Group: Yeah. So I’d say there’s a a few areas that we believe in in ways in which we can bring unique competitive advantages to that market, ultimately driving affordability into home insurance and supporting that dream of kind of homeownership for Americans. Let’s start with the new home builder channel. We have both internal proprietary new home product as well as third party new home product, which is designed exclusively for new homes sold through our embedded channel. And what that generally means is that

Adam, Runs Insurance Practice: Oh, I’m sorry. So could you have, you know, maybe a granular example? So someone’s buying a house, how do they how do they access Baldwin?

Trevor Baldwin, Cofounder and CEO, Baldwin Group: So let’s say you come in and you buy a home from a top 25 homebuilder. When you sign the contract to buy that home, we are then integrated into that home sales process, and you will be receiving a home insurance quote through our platform. Oftentimes, you won’t even know it’s us because it is white labeled as the builder who we are partnered with. And depending on the builder’s workflows, that integration could be directly at time of and that offer could be directly at time of signing the contract. It could be integrated into the builder’s captive mortgage arm, but it’s kind of it is unique builder to builder.

But importantly, we’re providing that home insurance quote as quickly as possible after they’re contracting to buy that home and positioning ourselves as that solution of convenience. Additionally, because we have proprietary home insurance product built exclusively for the new home channel, that provides us unique and compelling pricing advantages. When you think about new homes, they’re just superior risks. They come with home warranties. They’re built to the latest building codes, Oftentimes in areas that have, for example, wildfire exposure, all the brush has been cleared, and hurricane up and positively elevated.

And so these homes generate far better loss experience, and we’re able to return that better loss experience to those homeowners in the form of lower home insurance premiums. And that provides a compelling long term advantage because we build these products exclusively for that channel so they’re not polluted by the higher average losses of more traditional housing stock across The US. So that’s one example. The other example is how we’re integrating into the mortgage channel, and this is where segmentation is incredibly important. And so when you think about the mortgage channel, you now have to have a breadth of product and offering that is immense because you’re serve needing to serve potential housing stock that runs the gamut of, you know, being built at the turn of the prior century all the way to a pre owned home that maybe was built a year or two ago.

You have construction characteristics that range from frame to kind of full masonry and everything in between, different roof types, etcetera. And so you have to have a breadth of product to be able to competitively serve every single homeowner in that potential channel. And that’s where we have a unique, compelling advantage against the traditional captive and direct writers, where they only have one or two products. They’re limited by the fact that they sell only their own product, whereas we can bring forty, fifty unique home insurance solutions to market. Choice is key to winning in these markets, because you have to provide an experience that enables the ultimate end consumer to have confidence that the marketplace has been adequately canvassed to deliver the right coverage at a competitive price.

Adam, Runs Insurance Practice: And if you’ve said sorry if you haven’t said, but could you give us a range of how fast has that business been growing? Whatever time frame you wanna

Trevor Baldwin, Cofounder and CEO, Baldwin Group: Yeah. I mean, for the past three and a half, four years, it’s been growing for us organically at 20% a year, and that’s before we’ve meaningfully penetrated the mortgage channel. We’ve invested roughly $50,000,000 through our p and l since 2022, building out all the necessary capabilities to compete at scale in the embedded mortgage channel, And we believe we have the potential to have unique first mover advantages as a result not only of our scale in the insurance marketplace that enables us access to the breadth of product, but also the the magnitude of investment we’ve made into talent and technology to be able to automate that experience for the end consumer.

Adam, Runs Insurance Practice: Right. Right. Another another topic techno let’s talk about technology in the brokerage business and where you’re different. The there’s there’s a lot of insurance brokers, and there’s fair amount of good size. There’s 15 brokers over a billion.

And most of them have gotten there by just acquiring, acquiring, acquiring. And on the surface, it seems pretty simple because there’s really only two basic operating systems, Vertifore applied, and every broker’s on it. So what happens is in a lot of

Trevor Baldwin, Cofounder and CEO, Baldwin Group: these roll ups, they just leave them alone, but it’s the same operating system, one of two. So but you just you do something totally different. Right? We do. We have fully integrated every acquisition we’ve done onto a single instance of our agency management system.

We have common data attributing. We have common business processes and workflows. We have a common way in which we go to market and generate and sell new business. All of this enables us to steer the ship in a manner that you otherwise would not be able to do and drive consistent results around new business generation, around client retention, and around overall client experience. Just because you have a large platform all on an applied agency management system, if it’s not the same instance, then it’s not the same.

And as a result of our ability to be able to steer the ship, we can generate consistently outsized new business generation, ultimately propelling the durability of our organic growth profile over time as well as the consistency of our client experience. That also has enabled us to create unfettered access to our breadth and depth of expertise, resources, and tool sets. That’s also critical to how we generate outsized new business results and consistently great client experiences. In some of the earlier slides, you saw some of the statistics around how when a risk adviser joins our platform, either through regular way hiring or through m and a, they rapidly ramp up their productivity from a new business generation standpoint relative to industry averages. That is a result of both our go to market strategy, our risk mapping model, which which affords us a far higher win rate than industry peers on average, as well as how we create accessibility to the expertise and resources across our platform, widening the aperture of opportunities that a risk advisor can pursue.

They’re no longer constrained just by what their unique experience and expertise is, which tends to be fairly narrow in scope. Because they have access to our broader platform in a manner that’s consistently accessible, which is somewhat unique, they can go after a much broader array of potential clients leveraging the platform that we’ve built, ultimately powering the results that you’re seeing.

Brett Hale, CFO, Baldwin Group: And I’ll just add to that. In addition to the cross sell opportunities and effectively putting our best to bear in front of the client, the access to the data in terms of negotiations with insurance company partners and us being able to say, hey. We know we have x premium with you, and here’s the data that proves it rather than going into that negotiation guessing. We’ve been leveraging that really heavily because as we scale, and it’s one of the reasons why scale in this business matters, your ability to negotiate on those rates both from a profit sharing standpoint and a base commission standpoint, is empowered by that data.

Trevor Baldwin, Cofounder and CEO, Baldwin Group: As well as generating better outcomes for our clients. Yep. Right.

Adam, Runs Insurance Practice: Well, on that, if there are no more questions, we’ll wrap up. So, Trevor, Brad, thank you very much. Appreciate it.

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