This past May, the New York-based Integro announced it had raised more than $300 million in private equity and planned to open its doors in competition to the big-three brokerage firms.

The new firm is lead by its chairman, Bob Clements, who left a secure post as the founder of Arch Capital to head up the new venture.

Mr. Clements isn't new to start-ups. He is also credited with the founding of ACE and XL Capital, two companies with ties to Marsh & McLennan Companies--where Mr. Clements served for a time as chairman and chief executive officer of MMC Risk Capital Corp., before he was replaced by Jeffrey W. Greenberg in 1996.

Mr. Greenberg would later go on to head MMC. However, late last year, Mr. Greenberg resigned his post after New York Attorney General Eliot Spitzer filed suit against the company, charging that its brokers had engaged in bid-rigging and kickbacks, steering insurance contracts to carriers in exchange for lucrative volume-based contingency commissions, against the best interests of policyholders.

The significance of this suit is part of Integro's marketing plan. In the announcement of its birth, the firm said that corporate insurance buyers and their senior managements were becoming more alarmed over the lack of brokerage competitors for their programs and are "increasingly concerned with the alignment of interests between their advisers and [insurance] trading partners."

Integro, they said, would be a fresh face on the scene for the insurance brokerage industry, "which has been plagued recently by numerous regulatory investigations."

Among those joining Mr. Clements were Roger Egan as CEO and Peter Garvey as president--both former presidents of Marsh.

Mr. Egan was forced to resign in November of last year in the face of the scandal, and Mr. Garvey was named president and resigned a few months later, shortly thereafter joining Integro.

In the months since its birth, Integro appears to be on a hiring spree, bringing in numerous executives from Marsh to head operations and meet the firm's goal of having offices in all the major cities in the United States, along with key international insurance centers Toronto, London and Bermuda.

Most recently, the company announced the hiring of three executives with ties to Marsh in Toronto to run operations there. Integro hired David Spratt as chief financial officer, based in Toronto--he previously worked as global CFO for the Marsh Captive Management practice in Bermuda.

However, the list of defections is not limited to Marsh. Executives from Aon and Willis also have come on board, but from the press releases put out by the upstart firm, the largest contingent came from Marsh.

Those who are leaving the established brokers for Integro are seeking a breath of fresh air, according to Mr. Garvey. "We are looking for people who like being brokers, but in their recent experience felt they were being hampered from being good brokers," he said. "Some had to sell more services instead of serving the client. These are people who like to broker insurance. Others were forced to be managers instead of serving clients."

It is being a broker and loving that side of the business that is both an attraction for prospective employees and a selling point to new clients, according to Mr. Garvey.

For one, those who formed Integro are not novices. The brokerage team is comprised of individuals with years of experience under their belts. Some were attracted to a new beginning, while others came because upheavals in the industry prompted downsizing, noted Mr. Garvey. And still others came out of retirement, invigorated by the new challenge to be a broker again, he added.

All were attracted to a model that offers clients a brokerage team organized around the individual account, Mr. Garvey explained. Their work is supported by the most modern technology off the shelf--something the big three cannot offer, he contends, because they are bogged down supporting legacy systems.

The new technology, he said, allows Integro to be a lean, efficient client advocate, contending that it is the size of the major brokers that often gets in the way of serving their market. He believes its more modest size and personalized brokerage philosophy gives Integro the opportunity to target underserved large and complex risks craving an alternative to the big-three brokerages in the post-Spitzer world.

Such buyers also seek creative insurance brokerage solutions and the more personal and effective service Integro can offer, he contends.

To avoid falling into the trap of becoming another behemoth, Integro plans to remain a "flat" operation, according to Mr. Garvey--growing to no more than 2,000 employees within the next five years. "We want to remain nimble and focused on the client," he said.

But Integro was also created to be "a more enjoyable place to work," Mr. Garvey added, noting that the battle for scarce resources in the face of a soft market, along with the pressure to sell services over pure insurance brokering, made the atmosphere at the other, bigger firms a less pleasant place to do business.

"We have the risk of any start-up," he conceded, "but we have adequate capital and great advice to offer, which mitigates the risk, and we have the advantage of servicing an underserved market."

Integro is still in its formative stage, but its leaders feel the firm is on a positive track toward growth.

"We are blessed to have a number of clients who believe in us and are interested and engaged with us," said Mr. Garvey. "We have received a number of requests for proposals and are now reaching critical mass of people in our organization."

He added that Integro has quickly become "a serious contender. I think there is no question that large accounts are looking for multiple brokers, and all clients will be looking for alternative brokers over the next 12-to-18 months. We are pretty well positioned."

He noted that "we did not seek to serve our first client before July. We would not take on any client before we could do the best job for them. Now we are entertaining more potential clients."

Acquisition will not be the primary vehicle for the broker's expansion, according to Mr. Garvey. There might be a few acquisitions focused on specialties, but otherwise, growth will be organic, he added.

It's clear, however, that Integro intends to challenge the big three for major accounts and is determined to have a real impact on the market.

"I suspect there is some wishful thinking on their part and the hope that we don't become what they fear," said Mr. Garvey. "But what they are saying internally suggest the opposite. [What we hear] strikes us that they are concerned because we seek to serve their largest clients. Those [employees] who have joined us say that we have been a major topic of conversation from where they left."

Quotebox (mug may be coming)

"I suspect there is some wishful thinking by some of our competitors that we don't become what they fear, but what they are saying privately suggests the opposite. They are concerned because we seek to serve their largest clients."

Peter Garvey, Integro President

Caption for Logo:

Integro--with senior staff largely from the three major brokerages--believes buyers are looking for new choices after bid-rigging allegations rocked the corporate buyer market.