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We take 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:
The rock bottom Interest rates of recent years created exceptionally favourable conditions for private equity businesses looking for investment opportunities In Ireland. Specific to the insurance industry this has presented shareholders of Irish brokerages with the opportunity to cash out with a multiple of 10 x EBITDA, which was previously unheard of.
On the flip side to favourable conditions for borrowing, specialist brokerages are typically well governed as they are of course answerable to the Central Bank, and they are in most cases profitable in Ireland and hence viable for scaling and M&A activity. 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
- Madison Dearborn Partners backed ‘Ardonagh Group’ acquire €80M GWP brokerage ‘Frank Glennon Insurances Ltd’. Deal expected to go through In 2023.
- Madison Dearborn Partners backed NFP acquire ReSure and Aiken Insurances Limited In 2022.
- Howden Group acquire Aston Lark from Goldman Sachs & Bowmark Capital for £1.1B.
- US broker Gallagher acquire €60M GWP brokerage Innovu from MML Growth Capital Partners.
- London based Global Risk Partners acquire Plumb Underwriting and a majority stake In Renewable Energy specialists Crotty Group in Ireland.
- Apax Global Partners backed ‘PIB Group’ acquire Campion Insurance and BHP.
- Utah based Brown and Brown acquire O’Leary Insurance Ireland for an undisclosed sum In a bid to extend Its European reach.
- Specialist Risk Group expand Its Irish offering with acquisition of Blackrock In addion to Its TUEI Interest.
The outlook for the future level of transaction activity is mixed. Certain participants expect activity to slow on the back of rising purchase prices and capital becoming more expensive.
This is likely a result of increased competition for these assets. Meanwhile, the industry still remains fragmented, and there are a number of broker-owners nearing retirement age who will still be seeking succession and liquidity solutions in the years ahead.
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.
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.
2023 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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From our offices in Dublin and Cork we work on financial services (FS) and insurance roles at all levels, partnering with FS talent and world-class FS teams nationally. If you’re a financial services or insurance professional seeking a new opportunity; or an FS or insurance leader looking to attract new talent, our experts can help. Get in touch with our team today on hello@barden.ie and they’ll take it from there. Simple.