New merged entity will have a combined premium of £2.4bn
Cooper Gay chief executive Toby Esser has claimed his company’s merger with Swett & Crawford will make it the world's biggest wholesale insurance broker, writes Ben Dyson.
Cooper Gay was in “advanced deal discussions” with the US wholesale broker, formerly part of insurance giant Aon, to create a group with a combined premium of $3.5bn (£2.4bn).
Esser said it would allow the merged company to take advantage of the large amount of US wholesale business that finds its way to London – one of the attractions of expanding in the area.
“Lloyd’s has taken over recently from AIG as the number one writer of US excess and surplus lines business," he said. "We are very much a Lloyd’s-centric business and, as such, this is a huge feeder and a huge market for Lloyd’s.”
The firms hope to close the deal – essentially a share swap with a “small element” of cash – by the end of the month. “We are a long way down the line,” Esser said.
The combined entity, which will be headquartered in the UK, will be majority owned by Cooper Gay, and will have Esser as its group chief executive.
Cooper Gay’s chief financial officer, Phil Rock, will hold his position in the new firm, as will chief administrative officer John Flanagan and non-executive chairman Frank Witthun.
Swett & Crawford’s senior management team, headed by chief executive Neal Abernathy, will remain in place to run the US business, assuming control of Cooper Gay’s existing interests in the country.
Esser said the proposed merger was driven by Cooper Gay’s desire for continued growth in the reinsurance and wholesale insurance spaces.
For the past three or four years, the target has been the UK, but the company has turned its attentions to US wholesale, which Esser describes as “the biggest market in the world”.
Aon sold Swett & Crawford in 2005 to a consortium of investors that included Hicks, Muse, Tate & Furst Incorporated alongside Bank of America Capital Investors.