Phelim Murray, Senior Associate & Expert in Insurance Careers with Barden, takes a quick glance back over the last few quarters which shows two themes making an enormous impact in shaping the insurance industry as we know it. Those two themes are of course technology and M&A activity.
1) M&A is here to stay:
From a recent survey of over 200 C-suite insurance executives conducted by Deloitte, 75% agree that M&A will provide over 50% of growth throughout EMEA in the next 5 years.
Rock bottom Interest rates have certainly played a part in bringing private equity (PE) companies to the table who are keen to acquire and invest In specialist brokerages throughout Ireland. On the flip-side to interest rates being low, specialist brokerages are typically well governed as they are of course answerable to the Central Bank, and they are in most cases profitable and indeed scalable. So as far as investments go, they are low risk and likely to conform with the ambitious plans of your typical PE investor.
Recent M&A Activity
- Aon has agreed to buy Willis Towers Watson for $30 billion, creating the world’s largest insurance broker. Retaining the name of Aon, and being headquartered in London, the new company – worth $76 billion – will be 63% owned by existing Aon shareholders.
- Marsh acquisition of JLT in a deal worth $5.6 billon.
- Arachas, once Ireland’s largest independently owned brokerage acquired by Ardonagh Group in 2020.
- Wright Insurance Brokers, with offices in Wexford and Carlow were acquired along with Lloyds Broker Robertson Lowe by UK-based Aston Lark, which is controlled by Goldman Sachs.
- Belfast-based Willis Insurance and Risk Management (Willis IRM) acquired Leeds firm Hale Kavanagh Insurance Brokers Ltd.
- Innovu, which is backed by MML Growth Capital Partners, acquire Wexford Insurances and Sheridan Insurances consolidating much of the south east of Ireland’s commercial market.
- London based Global Risk Partners acquire Plumb Underwriting and a majority stake In Renewable Energy specialists Crotty Group in Ireland.
Consolidation has been a continuing trend in recent times as It offers attractive value creation for shareholders. One thing to keep in mind however Is that so many of these investors are committed to exiting within as little as three years, so change will be a constant.
2) Technology continues to drive the future of the insurance sector:
Insurers continue to embrace technology seeking out ways to harness the value In data analytics, automation and robotics.
According to Deloitte’s recent survey, 95% of their clients expect an increase in the use of advanced analytics over the next 3 years. All of Barden’s insurance clients have mirrored this, indicating that there will be a marked increase in tech and data analytics roles throughout 2020 and into 2021. This should result in better fraud identification, smarter underwriting & pricing policy as well as huge investment In digital marketing. Features such as chatbots are likely to become mainstream.
2021 is shaping up to be a year of significant change in the insurance industry in Ireland. In Barden we’re here to help both professionals and companies reach their full potential as they navigate this evolving landscape.
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