Ed set for management reshuffle and acquisitions after BGC deal

Ed chief executive Steve Hearn will run BGC Partners’ insurance brokerage division on completing the group’s acquisition of the broker.

Hearn will relinquish his Ed position on taking the job as chief executive of a newly created holding company overseeing the running of Ed and BGC’s other acquired broker Besso.

But Hearn told Insurance Times BGC was not done with acquiring brokers.

“Ed wasn’t the first acquisition in the broking space by BGC, but it also won’t be the last - I’m very confident of that,” he said.

In addition to acquisitions building the BGC broking arm, Hearn said funds would be available for Ed and Besso to separately grow through their own acquisitions. In stating this he dispelled suggestions of an Ed-Besso merger.

“The plan is very much growth,” Hearn said. “BGC’s appetite in terms of the insurance sector is significant, and the acquisition of Ed underlines that. When the time is right I will definitely be looking at what acquisition opportunities are available to us.”

MGA investment

Hearn said global wholesale and reinsurance broker Ed would target acquiring brokers with a wholesale specialism for acquisition in 2019, but added there would also be investment in MGAs.

Ed owns MGA Globe Underwriting in the UK and also has MGAs in France, Germany and Australia. Hearn said there was more Ed could do in this field.

“I’m an advocate of MGAs and think it is an important part of a wholesale proposition,” Hearn said. “I think it’s attractive providing you do it well and have appropriate segregations between the broker and the MGA. 

“I absolutely do want to invest in the MGA space in London and elsewhere where it makes sense.”

Hearn said Ed built up the segregation as it created Globe. Once the BGC deal is completed, Globe will remain part of Ed. But Hearn said under BGC ownership it was likely the segregation between Ed and Globe would grow.

“If I was looking into the future I think you will probably see greater segregation,” Hearn said.

Technology

BGC is a financial technology company which already offers a range of financial services. It acquired Besso in February 2017, and announced the acquisition of Ed earlier this week. Ed’s new chief executive will start on completion of the BGC deal, estimated to be in a few months, and will be an internal candidate that Hearn will assist in choosing. 

Along with funding acquisitions, Hearn hopes the BGC backing will help in recruiting new talent into Ed. 

And he said with BGC as a partner he was encouraged by how the broker could embrace technological developments.

“One of the things that attracted us to BGC is the very way they articulate their strategy, which is combining high quality talent with technology,” Hearn said. 

“There is a lot of high quality talent out there in the wholesale insurance and reinsurance specialty market in London and around the world and we’ll go and talk to to some of those people.”

Reinsurance

Formerly known as Cooper Gay Swett & Crawford, Ed has undergone a substantial reshaping in recent years, as swathes of the business has been sold off. The group rebranded as Ed Broking in September 2016, hiring 180 new staff in the process, and Hearn said 2018 had been its first full year of returning to growth.

Hearn wouldn’t be drawn on whether the deal might lead to Ed offering new capabilities, but indicated the group has been exploring new areas of growth since the rebrand.

Among the specialisms within the group he was most interested in growing, he picked out reinsurance.

“I’m not done on reinsurance yet,” he said. “Ed has invested pretty heavily in reinsurance talent, actuarial capabilities and modellers. Given other things that have happened in the market and certain acquisitions, buyers choice out of that becomes more limited. 

“There are a smaller number of large reinsurance intermediaries. That’s good for us, and creates opportunities for us. 

“I think reinsurance is going to be pretty high up in my list of priorities.”