The signs are all there for a season of consolidation
Joe Henderson has fired the starting gun on a race for his business this week, with the revelation that he is in the market for a merger. Henderson has not shied away from controversy, but his take-no-prisoners style has earned him a thriving business that would be a tidy prize for any national broker. Heath has gone to Gallagher and CBG looks likely to be snapped up by one of the big boys – it looks like the long-awaited second wave of consolidation is about to start rolling.
About time. Numerous brokers (Towergate, Giles, Bluefin, to name a few) have been waving their chequebooks for many months. The expected flow of deals has been stemmed by mismatched expectations on price: this seems to be changing.
But as big as a deal with Henderson or CBG would be, it wouldn’t be the near-mythical ‘transformational deal’ that has been long-predicted. Yet experts agree: it’s still on the cards, and looking more likely as capital picks up. The international brokers are on the hunt too, with Marsh a prime candidate for a big buy in the retail space, and Gallagher unlikely to stop at Heath. Giles and Oval are two obvious names in the frame, and their two principals, Chris Giles and Philip Hodson, are believed to be increasingly open to an exit. Watch this space.
• The industry’s next PR disaster is only one flood away. Bruised and battered by the public row over referral fees, insurers must learn the lesson: don’t leave it too late to take action yourselves, or the choice will be taken out of your hands. So this week’s revelation that an industry pool for flooding risk is on the drawing board is welcome news.
Of course, there will be details to iron out. But Pool Re, the government-backed pool for terrorism risk, has functioned well since its inception in 1993. This provides insurers with a useful blueprint. The statement of principles is close to expiration; time is running out. The sooner this plan gets off the blocks, the better.