’In the next five years, there will be more transformative change than there has been in the last 25,’ says chief executive
By Yiannis Kotoulas
If it wasn’t obvious before, the release of this year’s Top 50 Brokers report earlier this week confirmed it.
The dominance of American influence in the UK broker market is now significant and will only grow further.
Data from the report showed that 50.2% of the combined revenue of the 50 brokers included in the report came from 12 of the firms owned by North American corporates.
And were you to take account of the stakes owned by US private equity firms, this number would rise even further.
This represents a substantial increase from 2013, when the proportion stood at 36%.
The UK is somewhat of a natural expansion point for US brokers looking to grow internationally, with language not an issue and a somewhat similar culture – although I’m sure many might debate the culture point.
And as John Wepler, chief executive of American insurance industry-focused consultant MarshBerry, explained at yesterday’s (16 November 2023) invite-only Broker CEO Forum, many more American brokers are licking their lips at the prospect of entering the UK market.
He explained: ”In the next five years, there will be more transformative change than there has been in the last 25.
”Moving forward, brokers in the US have been growing dramatically and are moving aggressively into Europe, first targeting the English speaking countries of Western Europe, including the UK, Republic of Ireland and the Netherlands.”
Tip of the iceberg
There have been some high profile US acquisitions of UK brokers in recent years.
For example, GRP – now known as Brown and Brown Europe – was acquired by US broker Brown and Brown in July 2022 as the American firm looked to establish itself as a major force in the UK retail insurance market.
And it is not just the high profile single deals that tell the story – Wepler added that, to date in 2023, US brokers had completed 37 M&A deals in the UK.
The success of US brokers is driving their expansion into the UK, creating opportunities for those UK firms looking to bolster their own operations.
Wepler explained that the number of US brokers who had passed the $1bn revenue mark – the line where they usually begin to cast an eye overses – had also grown in recent years, from just two in 2000 to 20 in the current year.
“The consolidation that we’ve witnessed in the UK hasn’t even really begun yet and the amount of momentum that is mounting is substantial,” he said.
”We’re literally at the tipping point at the moment.”
Nine of the 20 US brokers over the $1bn revenue mark currently have a presence in the UK market – and Wepler said that another seven were currently evaluating M&A targets and preparing to enter.
With US control of the UK broker market’s combined revenue already significant, further growth of this proportion is nailed on.
So, who will be the next UK broker to be acquired by a US-based firm?
Watch this space…
With a particular focus on regulation, geopolitical and systemic risks and conflict, he has covered the insurance implications of the Ukraine war, riots in France and the commissions scandal for multioccupancy buildings insurance.View full Profile