‘Mind blowing’ AssuredPartners and Gallagher deal could cause M&A ripple effect – Mike Latham

The “mind blowing” acquisition of employee benefits and property and casualty (P&C) broker AssuredPartners by Gallagher could instigate an M&A ripple effect, where rival firms Marsh and Aon “ramp up” acquisition activity in response to the deal, predicted Mike Latham, chief executive at family owned broker Verlingue UK.

On 9 December 2024, Gallagher confirmed that it had agreed to buy AssuredPartners – which employs 10,900 staff across 400 offices – for just over $12bn (£9.4bn).

The firms expect the transaction to complete in the first quarter of 2025, with Gallagher hoping that its new purchase will help scale its UK and Ireland arm, as well as expand its retail middle market P&C proposition.

Latham told Insurance Times that this M&A move from Gallagher – and in particular the price reportedly paid for AssuredPartners – was “mind blowing”.

He continued: “It’s all adding up. The purchase of AssuredPartners by Gallagher is mind blowing. That means that Marsh will probably ramp up [its] acquisition strategy, it probably means that Aon will also ramp up [its] acquisition strategy – even though [it has] just agreed the deal with Griffiths and Armour [in November 2024].

“I just think [the market is] going to end up with a smaller number of players of any significant size to be able to provide the clients with adequate choice.”

People impact

Latham additionally commented on the cultural impact of such a deal.

In the modern recruitment market, potential hires spend more time and energy researching future employers, to ensure a good cultural fit with their own working approach. However, M&A negates such an undertaking.

Latham said: “When people are doing their transactions, they’re believing the story that is being presented to them by the acquirer. That acquirer then is acquired, so many of those promises are then often useless.”

Latham used broker Romero Group as an example here. The business was bought by AssuredPartners back in November 2023, but now – only a year later – Romero Group finds itself as part of Gallagher.

“Now, would Romero at the time liked to have sold to Gallagher? I’m sure it was an option,” Latham pondered.

Separate client pools

Despite the potential wider impact Gallagher’s spending spree could have on the broker market, Latham is unconcerned that Verlingue UK will be affected by any ramifications.

“I think it’s good news for us,” he confirmed. “The bigger these organisations get, potentially, the less relevant they are going to be to the clients and talent that we’re chasing.”

Verlingue UK’s typical clientele are organisations with around 100 staff and minimum £50m turnover that engage the broker to provide both insurance and employee benefits for an average annual premium of £200,000.

Furthermore, Latham’s attention is firmly on organic growth rather than acquisitional scale.

He explained: “M&A in the insurance space for us is unlikely in the UK.

“Multiples are too high and driven by aggregation [and] accumulation. People are paid high multiples in the belief that once they get to a larger scale, they [can] leverage that multiple.

“In the insurance broking space, there’s not a lot of brokers that would fit our acquisition strategy in terms of size, location, profitability. There are one or two, but those brokers are probably in a similar position to us in that they are generational businesses with no intention of selling.”