Broking group will focus on UK business and emerging markets, not more acquisitions, chief exec says
Toby Esser, chief executive of London-based wholesale and reinsurance broking group Cooper Gay, has not ruled out further purchases following the acquisition of US wholesale broker Swett & Crawford.
However, speaking to Insurance Times since completing the acquisition last Friday, he stressed that the main focus is now on building up the firm's UK capabilities.
Meanwhile, the directors of Cooper Gay & Company Ltd, Cooper Gay’s UK insurance and reinsurance brokerage, have described their firm’s 2009 results as “disappointing”.
The acquisition of Swett & Crawford has created a global wholesale and reinsurance broker with $3.5bn in premium volume, 1,500 staff and 60 offices.
While US-focused, Swett places large volumes of business at Lloyd’s, which Cooper Gay now hopes to capture. The combined group will be able to place the reinsurance business generated from Swett’s large US wholesale book. Swett previously did not have reinsurance broking capabilities.
“About 10% of Cooper Gay’s wholesale business goes into the reinsurance market. If were able to accomplish the same for anything like 10% of Swett’s business, that would be substantial,” Esser said.
While the firm is not focused on new acquisitions, Esser said it would consider opportunities. “We are already strong in the emerging markets: Latin America, Eastern Europe and Asia. There is not much to buy there but we would always be attracted to those regions.”
Esser contends that the Swett & Crawford acquisition has propelled Cooper Gay into a new broking category. “I’m a firm believer that size is important,” he said. “It is key in the business we are in today. It is very difficult to be small and have the right efficiencies of scale.”
Separately, the directors of Cooper Gay & Company Limited have expressed disappointment with the company’s full-year 2009 results in a Companies House filing.
The UK broker made an after tax profit of £739,000 for the year ended 31 December 2009, up from £681,000 the year before. This was largely thanks to a £4.8m tax credit. The pre-tax result was a loss of £4.1m in 2009, compared with a £1m profit the previous year. While turnover and other operating income was
up 23% from £35.2m to £43.2m, operating expenses were up 39% from £34.1m to £47.3m.
The directors said in the filing that a hardening of the market during the first half of 2009 had not continued in the past six months. “As a consequence our financial results for the full year were disappointing,” the report stated.