M&A set to reshape broking landscape

The consolidators have returned to the acquisitions trail in earnest over the last year with a whole raft of deals making the headlines as acquisitive growth seems to be firmly on the agenda of the biggest deal makers in UK broking.

Peter Cullum’s GRP has been the busiest broker in the M&A market, with the broking group completing no fewer than 19 broker acquisitions since the beginning of 2015, according to analysis of news articles featuring on the Insurance Times website.

One of GRP’s biggest deals was the purchase of The County Group in 2018, which brought in an additional £72m of brokerage. The Crewe-based broker became GRP’s latest regional hub, helping the Cullum-backed business build a national network of brokers, focusing on SME and personal lines.

While GRP may have completed the highest number of deals, it was Towergate and the newly formed Ardonagh Group that stole the show when it came to brokerage amounts changing ownership.

The deals for Chase Templeton and Autonet brought in a combined £280m in brokerage for Ardonagh, and went a long way in helping the group grow business by more than 11% and break the half a billion pound barrier in the process.

With chief executive David Ross aiming to double the size of the business over the next few years, the group is set to cast its net far and wide as it looks for deals.

“We have an international executive team running a UK business,” Ross said. “We have no choice but to explore opportunities outside the UK. We’re a £550m company. If we want to be twice as big as that in two to three years’ time, it will have to have a chunk of international exposure to it.”

Casting its net

Marsh is one broker that knows all too well the benefits of acquisitive growth, with its capture of Scottish broker Clark Thomson in April, its first acquisition since its £295m purchase of Bluefin 18 months ago. Clark Thomson brought in the additional £11.2m in brokerage that helped secure Marsh’s position at the top of the 2018 Top 50 Brokers table.

And Arthur J Gallagher International has also firmly stated its intention to tie up a number of fresh deals, after making its first acquisition in four years with the purchase of Chester-based Risk Services in May 2018.

Speaking to Insurance Times after announcing the deal, Gallagher’s chief executive of UK retail Michael Rea said the purchase would be the first of many.

“[This deal is] certainly the first of a number of acquisitions we plan to make in 2018 and beyond,” he said. “It is the Gallagher model to find like-minded businesses looking for the next stage of development. I wouldn’t describe it as a new strategy; it’s very much the existing strategy, we just had it on pause because we had a couple of very big businesses to digest.

“I would expect us to buy a number of businesses through the remainder of 2018 into 2019 and they will all look pretty similar – they will be community brokers, commercially led, and businesses that are a good fit with the ethos of our organisation.”

So, for now, the big guns look set to continue to splash the cash and tie up the brokers they see as the right fit for driving their business forward. And this could all lead to a very different looking makeup of next year’s Top 50 Brokers.