The M&A frenzy continues
While the general media hailed the return of private equity to the financial services sector after months on the sidelines, an orgy of deals in the general insurance market – many of them fuelled by recent private equity investments – completed ahead of the hike in capital gains tax on 5 April.
Though this flurry was widely expected, it was somewhat ironic that the consolidator king, Towergate, remained silent on the acquisition front for virtually the first time this year. Following the collapse of talks with Candover, the broker still made the virtual front page after concluding a £100m sale of part of the business to US hedge-fund Och-Ziff.
Meanwhile, Towergate chairman Peter Cullum’s consolidation vehicle CCV more than made up for the relative quiet of its cousin. The news that the company had bought Wales’ leading broker, Protectagroup was accompanied by the promise of four further deals – the first of which concluded the following day when it bought Bristol-based professional indemnity specialist HLI.
The move will be of particular interest to the largest broker in the region – and the fastest growing broker in the land – Jelf, especially in the lights of recent comments by chief Alex Alway that the company was looking to substantially grow its professional indemnity book. The purchase of Clarke Roxburgh topped the acquisition pile, while the move to buy Argyll means that the broker now has regional hubs in the Midlands and the South.
And though the tax changes could mean something of a hiatus for smaller deals, it is clear that overall the consolidation cycle is still very much in full swing. What is clear is that readers of insurancetimes.co.uk remain fascinated. In the past two weeks, the top four stories online involved broker acquisitions, with RSA’s purchase of Irish insurer Sertus Underwriting rounding out the top five list.
In fact, with the exception of Oxygen’s new Manchester office and the Motor Insurers’ Bureau revealing it had played a key role in
co-ordinating a police operation that led to 58 arrests, the entire top 15 most read stories over the past three weeks has featured either a change in assets or a change in ownership. The list includes CBG, Cobra, Swinton and Hiscox. During the year so far, 68 of the top 100 stories online have involved either a proposition or a deal itself.
And though the credit crunch may have loosened its grip on the online insurance space, there were still stories of note that appeared. While the International Monetary Fund reported the credit crunch could cost the global economy $945bn (£479bn), Fitch stoked insurer fears of escalating directors’ and officers’ and errors and omissions claims when it suggested their total pay-out could reach as much as $4bn.
Most read stories on insurancetimes.co.uk
1. Jelf buys 46m pounds GWP broker Clarke Roxburgh
Consolidator buys West Midlands broker for 18.3m pounds.
2. CCV acquires Protectagroup
Purchase of Wales largest independent broker sees company break the 200m pounds GWP mark.
3. Perkins Slade agrees Oval deal
Brokers in due diligence as deal nears
4. RSA acquires Irish insurer
Insurer buys Sertus Underwriting.
5. Jelf swoops for 21m pounds GWP Sussex broker
Purchase of Argyll establishes southern base for consolidator.