Aon acquisition of NFP set to have ‘significant effect on structure of insurance broking sector’

Aon’s acquisition of NFP is set to ”have a significant effect on the structure of the insurance broking sector”.

That was according to Insuramore, which said that Aon’s global market share would increase as a result of the deal.

Earlier this week (20 December 2023), the global broking giant signed a deal to acquire rival US broking firm NFP for a total consideration estimated to reach £10.6bn ($13.4bn) at the time of close.

Aon said the purchase had been agreed in a bid to expand its middle market segment.

Insuramore stated that the acquisition of NFP was the “largest deal ever announced in the global insurance broking sector”.

The insurance marketing consultancy firm highlighted that, in turn, Aon’s global market share would move up from 7.6% to 8.8% and that for commercial property and casualty (P&C) retail broking business, its global market share would advance from 8.9% to 9.7%.

However, Insuramore noted that the acquisition would not be enough for Aon to replace Marsh McLennan as the largest broker, with it still remaining in second place.

“By total broking revenues, Aon will continue to be ranked second globally and comfortably head of the chasing pack,” it added.

The deal

Insuramore also highlighted that the “transaction promises to reinforce Aon’s position in its core markets and to bolster it in markets in which it is less influential as part of the largest deal ever announced in the global insurance broking sector”.

As part of the deal, Aon will acquire NFP from funds associated with NFP’s primary capital backer Madison Dearborn Partners (MDP) and funds linked with HPS Investment Partners – both of which also hold investments in the Ardonagh Group.

On completion of the deal, NFP will operate as an independent but connected broking business, going to market as ‘NFP, an Aon company’.

Chairman and chief executive of NFP Doug Hammond will continue to lead the business, reporting to Eric Andersen, president of Aon.

Greg Case, chief executive of Aon, said: “The acquisition will advance our relevance to clients, create opportunities for our colleagues and further strengthen our shared cultural values.

“Doug and NFP have built an exceptional team, with a complementary one-firm mindset, and we expect to both learn from their entrepreneurial culture and share with them the depth and breadth of our capabilities to create more value for clients, colleagues and shareholders.”