Merger will help to build non marine business in London and Bermuda, says JLT Re chief.
JLT Group’s acquisition of Lloyd’s broker HWS Holdings is part of a plan for strategic growth, according to Alan Griffin, chairman and chief executive of JLT Re.
The deal saw JLT make a £5m down payment with a further sum of up to £3.75m to be paid dependent on the company’s performance.
The acquisition includes two of HWS’ Lloyd’s broker subsidiaries, Harman Wicks & Swayne, its London-based reinsurance broker, and Harman Wicks & Swayne International, a wholesale provider of SME products to UK brokers. JLT will also absorb HWS’ reinsurance operation.
HWS’ third subsidiary, Harman Kemp North America, which places risks from its US managing general agency into the Lloyd’s and London market, chose to remain independent.
Griffin said the deal wasn’t opportunistic but part of a strategic plan. He said: “We have acquired a good team of around 30 people, which will bring the division to around 50-strong, and we have no intention of scaling down. This is for top-line growth, it is not a question of bringing together two businesses that are simply meandering along.”
Griffin said the deal was in line with his plan to take JLT Re into the non-marine market.
Griffin said he had spent the past two years scouring the insurance market to find a company that would fit JLT’s gameplan.
“In the past couple of years, we have started to acquire individuals, and we have put together some very strong people on the non-marine facultative side,” he said.
“In talking to the guys at HWS it was very apparent to me that there was a natural opportunity there. The merger will help build the non-marine treaty business.
“While we lacked the distribution and relationships that HWS enjoyed, it didn’t have the analytic and modelling tools that are part of our expertise.”
Griffin described the deal as “the cleanest merger I have ever come across”.
The transaction will give JLT improved access to the London market, especially Lloyd’s, and Bermuda.
“These are areas where JLT has had a presence but no real penetration,” Griffin added.
In 2007, HWS reinsurance revenue was approximately £4.8m ,and the HWS UK broking revenue was £1.2m.