Hub International Ltd. said Tuesday it is entering the reinsurance brokerage market with the acquisition of Los Angeles-based THB Intermediaries Inc.

THB, which has been in business for 20 years and has annual revenue of about US$6 million, is one of a small number of facultative reinsurance brokers in the U.S. Facultative reinsurance brokers work with insurance companies to place portions of the insurers’ risks with reinsurance underwriters.

As the reinsurance market is fundamentally different from the retail and wholesale brokerage businesses at Hub International, THB will operate as a “specialty hub,” Hub International said.

“The acquisition of THB expands our total service range and reach in the insurance brokerage business and is an important extension of our acquisition strategy,” Hub International chairman and CEO Martin Hughes said in a statement. “The reinsurance brokerage business has consolidated dramatically in recent years, and THB was one of the few attractive reinsurance brokers remaining.”

THB operates with 32 employees out of four offices in New York, Los Angeles, Chicago and Dallas. The company president, Richard Di Clemente, will continue to lead as president of the new hub.

The growth strategy of Chicago-based Hub International includes an active acquisition program to expand its footprint across the U.S. In most cases, this strategy includes acquisition of regional hubs that become the base for further expansion within a region. At the same time, Hughes noted, THB represents a rare opportunity to expand into a new and largely consolidated national market.

Terms of the cash-and-common stock deal for THB were not disclosed.