GAB Robins' new chairman is starting an aggressive acquisition strategy. Elliot Lane reports
GAB Robins wants to "kick-start" the UK loss adjusting market by beginning a major acquisition strategy.
According to the new GAB Robins Global chairman Jun Tsusaka serious talks took place during 2003 with its leading competitors, Fairfax, the US parent of Cunningham Lindsey. But the negotiations failed at the last hurdle.
He said: "We have always looked for potential add-on acquisitions that will extend our product range or geographic region. Through 2003 we had a number of talks on potential acquisitions in the US and outside the US. They sadly didn't come to fruition.
"We will continue to pursue those that make sense. It may be Fairfax or the Crawford family - we will continue to talk anyone who is interested in divesting an asset. But we are prepared to take an aggressive stance on acquisitions."
After 2003 saw a "contraction in the claims arena", Tsusaka believes GAB Robins can now take advantage of the run-off opportunities appearing the UK as insurers and large brokers offload non-core activities.
"Opportunities are appearing for us, as insurers and carriers like AXA, R&SA and NU re-focus on what is core and what is non-core.
"It seems to make no sense for these clients to put resources behind non-core business when we can run-off their claims in a cost effective manner. It has been successfully done in the US, so we want to move it to the UK and Australia."
This could involve buying a run-off company or find an experienced team, added Tsusaka.
Joe Zubretsky stepped down from the chairman's role at GAB Robins because the company wanted to be "responsive to the requirement of better corporate governance", says Tsusaka.
Zubretsky remains chief executive and president of GAB Robins and will still take an active part in the direction on the company.
"The only thing that has changed is that where Zubretsky chaired meetings, they are now chaired by me. Zubretskys' remit has changed so we could free him to pursue business orientated activities. He will be a resource for John Castagno in the UK and for our Australian operation."
Zubretsky will also push Brera Capital Partners M&A activity into Europe and Australia after making two small acquisitions in the US. GAB Robins bought two books of business; a £9m book from a healthcare company in Nevada and an £18m stake in a mutual insurer in New Jersey, said Tsusaka.
Brera has held an interest in GAB Robins for five years and has always made it clear that the investment would be divested at some stage. Tsusaka says there is more too do at GAB Robins.
"Brera is an investment fund so at some stage we will be divesting our interest in this company. But we don't have any short term plans to do that, and we are committed to GAB to bring revenue and probitability."
He expects GAB Robins UK to increase revenue by 2%-3% this year and probitability to be "double digit".
And what of the UK loss adjusting market? "This is the right time to take action in the UK. Both parent groups of Cunningham and Crawford are in financial trouble so it gives us an opportunity to take advantage. I want us at number one."