KeyCorp will sell the insurance and benefits services business the bank picked up in its 2016 acquisition of First Niagara Financial Group, and the buyer wants to grow the business.
The Cleveland-based bank will sell Key Insurance and Benefits Services operations to USI Insurance Services, headquartered in Westchester County.
Key added the insurance and benefits services business as part of its 2016 acquisition of First Niagara Financial Group. The business has a division headquarters in Buffalo, and a total of 350 employees at eight offices in upstate New York, Pennsylvania and Connecticut.
"The plan is to keep the employees here in Western New York," said Matt Pitts, a Key spokesman. The employees work in Key's Larkinville operations; Pitts said he did not know how many of the 350 are based here.
"This is, I think, a great opportunity for them," Pitts said. "We loved having them with Key during the time they were with us."
USI bills itself as one of the largest privately held insurance brokerage firms in the nation, with 6,000 employees at more than 150 offices.
Ed Bowler, USI's chief financial officer, said the company is determined to increase the Key insurance business, not reduce its headcount.
"We need all of them, and we plan to grow the business from here," he said. "This is a growth play."
USI doesn't have a presence in Buffalo or Rochester, which Bowler said are home to the two main offices of the Key insurance operations.
The deal is expected to close sometime in the second quarter. Terms were not disclosed.
Key added insurance to its offerings through picking up First Niagara Risk Management, the insurance subsidiary that it renamed in late 2016. First Niagara had built up its insurance operations through a series of acquisitions over the years.
"Through this sale, we are highlighting our focus on delivering core banking services across our footprint," said E.J. Burke, co-president of Key Community Bank. "We believe that Key Insurance and Benefits Services and USI represent complementary businesses without geographic overlap and a shared commitment to providing strong client service and product expertise."
USI says its began in 1994 with one office, 40 employees and $6.5 million in revenue. The firm now has revenues of nearly $2 billion.
Bowler said the deal gives USI an expanded geographic presence, and described Buffalo and Rochester as a good fit based on the businesses located there.
"We're predominantly in the middle market, so Buffalo and Rochester couldn't be better markets for us," he said. "It's great to be in that part of the state."
Boland said USI's plan is to expand here as time goes on, through a combination of organic growth, acquisitions and hiring more sales people.
"We're just starting," he said.