Two major transactions were announced this month, Canada’s Fairfax Financial acquisition of Allied World for $4.9bn, a 18% premium to the closing price, and Liberty Mutual’s acquisition of Ironshore for approximately $3bn, both subject to regulatory approval. Hastings Group has a new major investor in Rand Merchant who acquired a 29.9% stake from Goldman Sachs’s investment company and other shareholders for an estimated £490m.
Other transactions included the acquisition of Besso Insurance Group by BGC Partners, announced in early January and valuing Besso at c.£70.5m, B.P. Marsh sold its 37.9% stake and in December made a further £4m investment in Nexus Underwriting. County Group acquired Wrexham Insurance Services, its 3rd acquisition of 2016, H&H Insurance acquired Armitage Livestock Insurance Agency and PE firm Acuity Investment is planning to acquire insurance business service provider Pro for £8.3m from Pro Global Services.
This month saw transactions involving some of the largest brokers in the UK, Marsh announced it had reached agreement to acquire UK national broker Bluefin Insurance Group from Axa for £295m, JLT announced that it had sold the majority of Thistle UK’s activities to PIB, including the schemes, SME commercial and MGA business and Madison Dearborn, a US private equity firm, has completed the first stage of its investment in Towergate, acquiring up to 17.9% of the voting rights and making it the second largest shareholder in the group.
PIB had an active month as it also acquired Aberdeen-based commercial broker Carmichael & Partners, while Norwich-based broker, Alan Boswell Group, strengthened its position in the region with the acquisition of Cambridge-based S-Tech. Headley Insurance Services announced its second deal of 2016 with the acquisition of Godalming-based commercial broker Robinson Buckley Insurance Brokers and Bristol-based Brunel Professional Risks expanded its footprint with the acquisition of West Sussex PI specialists Pinsure and PI4U from Kevin Locke.
Insurers were also active with Bermuda-based Argo Group announcing that it had reached agreement to acquire Ariel Re, an international insurance and reinsurance business and Lloyd’s Syndicate. Markel International acquired London-based marine liability MGA, Galleon MarineInsurance Agency. Recently established UK marine cargo underwriting agency, The Fiducia MGA Company Limited, attracted up to £1.8m of investment from B.P. Marsh and Partners.
Transaction volumes have continued through October following the pick up last month. As noted last month, Japanese property & casualty insurer Sompo has announced its $6.3bn acquisition of Bermuda based Endurance, subject to shareholder and other legal approvals. The deal was at a 41.6% to Endurance’s last three months’ average share price.
Newly independent Broker Network has announced its first significant transaction with the acquisition of Reading based Finch Commercial, subject to regulatory approval, Torlea, a London based holding company for US and Canadian investors, has announced the acquisition of Kinetic, a Lloyd’s broker, from a subsidiary of Hamilton Insurance Group. PIB has announced another deal, the acquisition of QPI Legal, a Northampton based professional indemnity specialist, Stackhouse Poland has announced its second deal of the year with the acquisition of the general insurance activities of Lucas Fettes, and NSM Group, the Philadelphia based insurance group led by Geoff McKernan, has announced the acquisition of Vantage Holdings, an outdoor leisure and classic car broker.
Technology in the insurance sector gained new investors with Neos, the smart home InsurTech firm, attracting £1m of funding from ex-ingenie investors Richard King, Steve Broughton and Gary Lineker, valuing it at £8.4m and Startupbootcamp also gained £1m of funding for InsurTech startups.
Other matters of interest were Capita selling its Danish TPA, AIG selling its Latin American and Central & Eastern European operations to Fairfax, Marsh has been reported to be looking at acquiring Bluefin from Axa and a significant block of shares in Hastings Insurance was sold by some of the original investors.
M&A activity has picked up again in September and has continued through into early October with the announcement of a significant deal by Sompo and Endurance.
Autonet Insurance Services has announced a buy-out of the business led by Highbridge (HPS Investment Partners), subject to FCA approval, for a sum thought to be in excess of £100m. Highbridge has also been involved with the tender to sell 23% of Towergate to Madison Dearborn Partners. This represents the holdings of 35-40 minority shareholders in Towergate and would make Madison Dearborn the second largest shareholder in Towergate. Global Risk Partners have been active announcing two transactions, that of Marshall Wooldridge, a commercial broker based in Leeds and SLK General Insurance Services, a community broker based in Ely. Tasker Insurance Group has acquired Kent based Enni-Scheme Commercial Insurance Services, a commercial broker with specialist schemes for guest houses and unoccupied property.
The Canada Pension Plan Investment Board has agreed to acquire Lloyd’s insurer Ascot Underwriting from AIG and will continue to run it as an independent business. Randall & Quilter have been active acquiring the run-off business of Aegon Insurance Company and Royal London Insurance, the latter for £12m. XL Catlin has agreed to acquire Brooklyn Underwriting in Sydney, Australia, a Lloyd’s MGA. Assured Guaranty in Bermuda has agreed to acquire MBIA UK Insurance Limited from MBIA Inc for consideration of approximately $320m, subject to regulatory approval.
Esure has revealed that it intends to demerge Go Compare, the price comparison website, and list it on the stock market.
August is usually a quiet month for M&A and this year has proved no exception with only a handful of brokers concluding smaller transactions.
LGR Solutions acquired Adrian Shaw Insurance Consultants in Hove, County Insurance acquired Plimbley, bringing their branch network up to 18 and recently established Colmore Insurance Brokers acquired Webb Holton.
Insurers were also in the news with Hiscox completing the sale of their Hong Kong operations of Direct Asia to Well Link, a Hong Kong-based financial services group.
July has been another month of low M&A activity, with no significant transactions taking place. Most notable is the entry of Verastar, a provider of services to small businesses, to the insurance sector with its acquisition of the Octopus Group and its subsidiary The Insurance Octopus. The previously announced separation of The Broker Network from Towergate was completed following FCA approval and it is now independently owned by Highbridge.
Other more modest transactions include Henderson Insurance Brokers acquiring Branch Insurance in Sunderland, Bluefin acquiring Osbornes Insurance in Oxford, Bennett Christmas acquiring Southwater Insurance Services in West Sussex and Phillip Truman has brought new investors into UKGlobal Risk Solutions in the form of Nic Hamblin and the Hodson family.
Elsewhere Charles Taylor has acquired CEGA Solutions for £23.8m plus an earn-out of up to £6m; CEGA provides technical medical assistance and travel claims management services. Nexus Underwriting has acquired Hong Kong based MGA Beacon Underwriters, a Lloyd’s coverholder for marine cargo, hull and machinery and AmTrust has acquired Arc Legal for an undisclosed sum. The Gibraltar Financial Services Commission instructed Enterprise Insurance to cease issuing new policies and has appointed a provisional liquidator following the company failing to find new investment.
June has mirrored May with a low level of M&A activity and no major transactions. PE backed companies completed deals in the month with PIB (backed by Carlyle Group) acquiring Channel Insurance Brokers in Guernsey and Global Risk Partners (backed by Penta) acquiringCavendish Munro, a professional indemnity specialist. Privately owned Henderson Insurance Brokers has made it second acquisition of the year with Branch Insurance in Sunderland, a commercial and personal lines broker selling to them.
Insurance company run-off specialist Compre has acquired Allianz IARD’s Ridgwell Fox & Partners’ pool legacy reinsurance business following on from its March acquisition of QBE’s RFP legacy pool.
Following last month’s increase in activity May has fallen back to a relatively low level. PE house Livingbridge has sold out of Kingsbridge Risk Solutions, with mid-market PE house Dunedin buying in for an undisclosed sum. B.P. Marsh, a niche venture capital provider, has sold its 1.32% stake in Randall & Quilter for £1m and US broker and consultant, NFP, has added to its UK presence with the acquisition of Linkfield Corporate Solutions, a commercial motor fleet specialist, to enhance its consulting capabilities and gain further access to UK markets. AmTrust Financial Services Inc has acquired UK based Genworth Financial Mortgage Insurance from Genworth Financial Inc for approximately $55m.
The Lark Group has acquired Kent based Euromarine insurance Services, a marine underwriting agent and broker; this brings Lark’s headcount up to 350 across eight offices. Global Risk Partners, the Penta backed investment vehicle, has funded the acquisition of McGrady in Northern Ireland via Abbey Bond Lovis, its existing investment. Dublin based XS Direct Insurance Brokers has acquired a stake in Kent based Eridge Underwriting Agency for an undisclosed sum, with €5m of funding being provided by BMS Finance. Beazley, the specialist worldwide insurance group, acquired S.R.P. Edwards, a specialist marine submersible underwriting agent.
April saw an increase in M&A activity in the insurance sector with US-listed insurance group AmTrust acquiring ANV Holdings, a specialty insurance company with three Lloyd’s syndicates, from Ontario Teachers’ Pension Plan for $218.7m; private equity firm Anacap sold SME broker Simply Business toAquiline Capital Partners, generating a reported return of 4.5 times their original investment. Global Risk Partners, the Penta backed investment vehicle, financed the MBO of Lonmar Global Risks which will sit alongside Ropner and bring their run-rate EBITDA to over £10m. Elsewhere in the Lloyd’s market PSC Insurance Group acquired John Holman & Sons and Omers Private Equity agreed to acquire a minority stake in Brit from Fairfax Financial.
UK regional brokers were also active with Bluefin acquiring Liverpool-basedExchange Insurance Services, Wilbourn Insurance Services in Arbroath and Grampian Insurance Services in Forfar; Minority Venture Partners invested in Lutterworth-based Kingsway Insurance Services and Weald Insurance Brokers acquired Steadman & Hozier in South Croydon.
Allen & Allen acquired the staff and assets of Service Underwriting Agencyand announced a management reorganisation with Sharon Beckett taking over as CEO of retail broking operations. In the claims sector Alan Horton led an MBO of Independent Group (UK) Ltd backed by private equity firm Rcapital Partners.
March was a very quiet month with the most material UK transaction being the £46m buy-out of The Broker Network from Towergate, backed by Highbridge, the Private Equity fund behind Towergate. Earlier in the month Integro acquired Lloyd’s broker Croton Stokes Wilson Holden for an undisclosed sum. Randall & Quilter was busy, selling Synergy Insurance Services to Plum Underwriting, owned by Global Risk Partners, and buying captive insurer Rank Overseas in Guernsey.
Catalina, the Bermuda based manager of insurance and reinsurance companies, acquired AGF Insurance, an employers and public liability insurer, from the UK subsidiary of Allianz.
Private Equity were in action with Albion Ventures backing Innovation Broking, currently trading as Dickson Financial Services, headed up by Paul Dickson and Howard Pearson. Private equity backed Stackhouse Poland acquired professional indemnity specialist Chris Frost.
No large transactions were announced in February although PIB, the Brendan McManus/Chris Giles vehicle backed by The Carlyle Group announced two transactions, the first being the acquisition of Fish Insurance, the personal lines, independent living broker, from Capita and the second being the acquisition of Cooke & Mason, a commercial broker based in the East Midlands, both for undisclosed sums. Private equity backed Global Risk Partners acquired Synergy Insurance Services, specialist HNW underwriting agent, from Randall & Quilter via its existing underwriting agent Plum Underwriting.
Henderson Insurance acquired The John Reynolds Group, a credit specialist based in Manchester. In Northern Ireland, Abbey Insurance Brokers, part of Prestige Insurance, acquired the Open and Direct business with its 13 offices and 200 staff from Swinton, in a deal financed by Ulster Bank. Lorega, an MGA, completed its MBO in a transaction backed by Alcuin Capital Partners. LSL Property Services acquired a 65% stake in Group First, a provider of mortgage and protection broking services to purchasers of new homes for £9.1m, with a put and call option to acquire the balance in three years time.
January did not see any large deal announcements in the General Insurance sector, but several smaller transactions, which shows the consolidation of the insurance industry continuing at a pace. BGL, the personal lines broker and services business, has confirmed that it is considering a listing on the London Stock Exchange. BGL represents an outstanding organic growth story over the last ten years, having seen their turnover grow from £95m to £507m in 2014 and their EBITDA from £11m to £126m over the same period.
In commercial broking, private equity backed Aston Scott acquired Essex-based First Commercial; Cobra, the commercial broker and network, acquired Robert Edwards (Southern) and Paul Baker Insurance Services acquired park home specialist RK Shipman.
In the personal lines space, Right Choice Insurance Brokers acquired three motor breakdown brands from insurer ERS, including the transfer of 150,000 policies and Principal Insurance, the specialist motor bike broker, acquired motorcycle books of businesses from Simply Insurance and iGO4. US-owned Ryan Direct Group agreed to acquire Northern Ireland-based managing general agent Midas Underwriting, Chinese-owned Houlder announced the disposal of Lloyd’s broker Houlder Insurance Services to Lime Street Brokers whileDevon Underwriting, a Lloyd’s corporate vehicle, was acquired by Helios Underwriting.On the international stage Aviva Canada agreed to acquire RBC General Insurance, a household and motor insurer, from Royal Bank of Canada for £281m.