When his Woodland Hills company, SGB-NIA Insurance Brokers, was acquired for $33 million last year, chief executive Jim Scanlon decided to splurge: He and his wife finally replaced the bedroom set they got as a wedding gift in 1981. This summer, they’re planning their first European vacation. The down-to-earth reaction is typical for Scanlon, 56, whose life story reads like, “It’s a Wonderful Life.” Instead of following his dream to attend law school, he stepped in to rescue his family’s failing Calabasas insurance agency after his father was diagnosed with multiple sclerosis. And while he’s financed his children’s study-abroad trips to Spain, Ecuador and Belize, his most memorable travel was to an insurance conference in South Carolina. Scanlon and his fellow partners got undisclosed lump-sum payouts after SGB-NIA was sold Nov. 1 to Arthur J. Gallagher & Co., an international insurance brokerage based in Itasca, Ill. Gallagher’s largest office in the nation is in Glendale, and it’s No. 1 on the Business Journal’s list of local insurance brokerages, with premiums of $1.8 billion. But Scanlon isn’t going to take the money and run. The sale came with a potential earn-out of $5.2 million over five years if the unit’s operations meet certain benchmarks. And Scanlon plans to stay at his desk for at least eight years. By that time, his youngest son – one of 11 children he has with his wife, Maureen – will be 18. Their oldest, 31-year-old Brenna, graduated from Thomas Aquinas College in Santa Paula and became principal of Our Lady of Guadalupe Catholic School in Oxnard. She recently gave birth to the Scanlons’ first grandchild. The next half-dozen kids are currently attending or have graduated from Franciscan University of Steubenville, Ohio, where Scanlon joked that a bench should be named in his honor. With four more to put through college, it’s no surprise Scanlon isn’t planning to retire anytime soon. Besides, he said, “I’m excited to help execute the strategy we’ve mapped out. And I don’t know what else I’d do with myself.” Attractive target That’s not surprising for a guy who built his dad’s two-man, business-to-business insurance office into one of the country’s top-100 independent brokerages, according to trade publication Insurance Journal. SGB-NIA had premium volume of $140 million last year and had earned a prestigious “best practices” designation for several years running from the Independent Insurance Agents & Brokers of America, a trade organization. (It is no longer on the Business Journal brokerage’s list since it is owned by Gallagher but was No. 8 on last year’s list based on 2013 data.) That made it an attractive acquisition target in the consolidating insurance market. Scanlon became accustomed to entertaining – and rejecting – eager suitors over the past decade. But last summer he and his partners realized they’d grown as large as they could get on their own, with 60 employees in Woodland Hills and half a dozen in Camarillo. They started talking seriously to Gallagher because it had never been a direct competitor of SGB-NIA. Their conversations turned up something appealing. “It’s a public company, but the CEO is still named Gallagher. That means the company is run by brokers, not hedge fund guys,” Scanlon said. “Most sales and marketing companies are highly competitive and cutthroat. This is the nicest, friendliest organization you could find.” In the nearly six months since the sale, Scanlon insisted not much has changed at his agency, which still specializes in selling business coverage to contractors, engineers, manufacturers and farmers. “We flew to Itasca, signed a bunch of papers and came back to our office. There’s a little more administrative stuff and we had a small reduction in our accounting staff, but that’s about it.” He communicated news of the sale to his employees early, and while there were some “tough conversations,” he maintained the handful of employees laid off ended up in better positions. Regular guy Scanlon is about as far removed as possible from an intimidating, starched-shirt CEO. Employees stopped by during a recent photo shoot – not to admire their boss, but to rib him mercilessly. His Warner Center office is low-key, its walls decorated with oversized photos of mid-century San Fernando Valley scenes that remind him of growing up in Reseda in the 1960s and attending Encino’s Crespi Carmelite High School. The walls also feature photos of each client’s business headquarters to remind the staff that each policy provides protection to a company, its employees and their families. That sensibility was one of the main attractions for Gallagher, which has grown through hundreds of acquisitions in the past decade, said Scott Firestone, regional executive vice president of the firm’s Western U.S. operations. “Jim brings a wonderful, familial leadership style and his customers really do value that face-to-face, one-on-one touch they get from him,” he said. The SGB-NIA acquisition allowed Gallagher to expand its middle- and small-market business and added to its Glendale location with a strategic geographic base in the West Valley, Firestone said. “With the spread-out nature of L.A. and the traffic, it’s nice to have a broad footprint. And we see the Ventura-Oxnard area as very important to us in the future, so it makes sense to have a meaningful presence there too,” Firestone said. Like Scanlon, Firestone grew up in his family’s insurance business and the two men have known each other for their entire professional lives. “We had a keen eye on his company for years and we are thrilled about the fact that Jim and his team had a choice and they selected Gallagher,” he said. In fact, Firestone’s father knew Scanlon’s father, who founded James C. Scanlon Insurance in Calabasas in 1964. But Scanlon didn’t plan to follow in his dad’s footsteps. He studied history at Loyola Marymount University in Los Angeles, where he met his wife, and planned to go to law school. “History majors are good at two things: Cocktail parties and ‘Jeopardy!’” he noted wryly. But after Scanlon graduated in 1981, his father’s illness worsened to the point that he could no longer effectively manage the company. Scanlon knew nothing about the insurance business, but he stepped up when his mother Patricia, now 83, asked him to help. Scanlon found the relationship aspect of the business was a natural fit. “Business owners always have their own interesting stories and it’s a lot of fun working with them. Most are truly nice people who care about their employees,” Scanlon said. But heading a company was a baptism by fire. After his father died in 1983, Scanlon struggled and the brokerage wasn’t profitable for a few years. “I really enjoyed the sales side,” he said, “but the finance side was difficult.” In 1995, Scanlon partnered with Mario Guerra and Paul Burke to form SGB. Guerra, a long-time mayor of Downey who narrowly lost a bid for state senate last year, brought in political savvy and insurance industry experience. Guerra said he and Scanlon spent time together and made sure their wives got along before they became partners. “Jim has always had a great vision. It was important for me to find a partner with ethics and values because I knew we’d be taking care of a lot of people and their families,” he said. Both Guerra and Scanlon are devoted Catholics, something Scanlon says informs his business practices. But doing business ethically is a priority for all his partners, no matter their religious traditions. “We are not preaching in the lunchroom or wearing it on our lapels,” he said. “We all share a common thread of decorum that has served us really well.” Global reach The most challenging aspect of Scanlon’s insurance practice had always been educating business owners about their risks and the financial consequences they carry, and persuading them to make bigger investments in safety. Early on, SGB added safety and loss-control consulting services that proved key to gaining new clients and retaining existing customers. In recent years, though, the CEOs of mid-sized agriculture, construction, engineering and manufacturing firms began asking about the risks associated with expanding into foreign markets. In short, Scanlon’s client base needed help that he couldn’t always provide – a key factor in his decision to sell. “Our ability to grow hinged on us becoming part of a bigger company,” he said. Now, he can refer them to Gallagher offices in 30 countries around the world and connect them to Gallagher’s partner agencies from Sri Lanka to Zambia. Meanwhile, he will still have time for his work with the Ventura Economic Development Council, which he chaired for several years. And there are the demands of a dozen professional committees, including the board of regents at Thomas Aquinas College and a seat on the board of trustees at Holy Cross College. “Giving back is a big deal to me,” he said. But he can’t spend all his time volunteering. He and Maureen still have four children living in their seven-bedroom home in Camarillo. Those kids, who attend St. Augustine Academy in Ventura, are a cinch to handle for parents accustomed to tracking soccer practices on an Excel spreadsheet. Scanlon enjoys taking them to high school baseball games and to watch late-model Pintos and Vegas speed around the track at the Ventura Raceway. “Kids want quantity time, even if that means just going to the grocery store,” he said. This summer, however, he and Maureen may finally get some time to themselves. They’re planning to visit Heidelberg, Germany, where Maureen spent time in college. It should give him a chance to finally pin up an overseas travel picture next to all those Valley vistas on his office wall.