How will Deakin help Gallagher UK's masterplan?

Arthur J Gallagher has pulled off a coup by tempting Aviva intermediary and partnerships director Janice Deakin to become its UK commercial director.

Deakin is highly regarded among brokers, and she has an in-depth knowledge of the broker market from her work at Aviva. As she puts it: “I’ve come across every size and shape of broker in the past seven or eight years.”

Equally, she knows what insurers want from brokers and underwriting agencies, which will help Gallagher cement relations with its capacity providers.

This knowledge will help Gallagher find teams to hire and companies to buy as it grows. But what is Gallagher’s master plan in the UK, and how else can Deakin help?

Commercial retail expansion

Gallagher is big in the wholesale business, particularly through its Lloyd’s broking unit. It has bulked up its personal lines business over the past year. It has also grown its commercial schemes and affinities book. Before Deakin, its most recent hires were Alan Sanderson and Peter Cooper from rival broking group Brightside, who will work on schemes and affinities expansion.

The next area of attention is retail commercial. The Heath Lambert acquisition in 2011 helped here, but there is room for further growth.

Gallagher UK chief executive David Ross said: “We are probably slightly underweight in open market retail commercial broking. We are aware of the fact that we could be considerably bigger, better and stronger in that field. We see lots of scope for improvement and investment as we ramp up our distribution throughout the UK. You will see more from us in that area.”

Acquisitions

Like its US parent group, Gallagher UK is known to be acquisitive and plans to continue to buy brokers. It bought nine companies last year. It aims to buy specialist companies that are among the top three firms in their chosen field.

Where possible, the company likes acquisitions to help fuel other parts of its business. So, for example, it likes to channel premium from its broking acquisitions through its underwriting operation.

The company is rumoured to be buying property broker Barbon, which, if it happens, would be its biggest commercial retail acquisition to date after Heath Lambert.

While Ross would not comment on Barbon or any other potential purchases, it is safe to assume that more acquisitions will be made this year.

He said: “We bought businesses last year equivalent to half the size of Heath Lambert and we will have doubled the size of Heath in the retail space in 24 months.”

Gallagher UK can also expect backing from its US parent for acquisitions. The UK company is becoming an increasing contributor to the overall Gallagher group. Ross said the company controls 10 times the premium it did five years ago.

He said: “Because we run an integrated model, we are able to generate considerable commercial uplift, through investment in people, platform and processes. The Gallagher group is happy to continue to back us - and you can expect us to remain active in the space.”

People

As Deakin’s hire shows, it is not just about the deals. Gallagher is also focused on hiring people who can produce business for the firm quickly after they come on board. Hires such as the e-trading team from Towergate in June 2011 have boosted the premiums under Gallagher’s control. 

Ross said: “I have been stunned by the impact those people have had on our business.”

Bringing it all together

Gallagher’s desire to grow and take on the big hitters in the large corporate space and the consolidators in the SME world is getting the company noticed. It is also becoming an increasingly complex group. This requires explanation to the outside world. Here, Gallagher hopes Deakin’s communications skills will prove invaluable.

Ross said: “The key thing for us is to make those outside the company aware of what it is we stand for, as our business continues to develop momentum. A huge part of Janice’s job will be to build improved relationships with clients, markets and influencers and to inform them of exactly what it is that makes us tick.”