Aviva lined up for capacity deal with Gallagher’s MGA
Arthur J Gallagher (UK) Limited’s profits fell 22% last year as the company was hit by £2.7m losses on the First City acquisition.
It comes as Gallagher Underwriting Group is on the search for new capacity providers, with Aviva being lined up to take a large role, Insurance Times understands.
The 2010 results showed that Gallagher pre-tax profits before interest fell to £6.4m compared to £8.3m in 2009. Turnover increased to £68.4m compared to £53.6m in 2009, latest accounts show.
Gallagher booked revenues of £13.2m from First City, which recorded the £2.7m loss after integration and amortisation costs.
Gallagher chief executive David Ross said at the time of the acquisition in March last year he expected First City to bring in an extra £20m full year brokerage.
Gallagher is expecting significant uplift in the 2011 results as the company had bought Heath Lambert in a £97m deal.
The results emerged as Gallagher searches for new capacity providers. Gallagher has three potential options: to stick with Inter Hanover as the sole provider of capacity to Gallagher Underwriting, to bring in Aviva and/or other capacity providers to take over, or finally have Hanover working alongside other insurers in a new deal.
Gallagher Underwriting is led by the highly-regarded Sian Fisher and incorporates incorporate two managing general agencies (MGAs); OIM, which it acquired in 2008; and Woodbrook Underwriting Agencies which writes around £50m gross written premium.
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