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March, 2021

 

Q1 2021 has been a record quarter for announced UK insurance M&A, with a huge number of transactions having been precipitated by the spectre of an increase in the rate of Capital Gains Tax in the 3rd March Budget. Many of these transactions went right to the wire, completing on the 2nd March. In our February review we took a 5th March cutoff date and so many of the transactions that took place in the first days of the month were included in that newsletter. The majority of transactions below will have completed before the Budget, but were only announced after the 5th.

This applied to transactions announced by Clear and PSC Insurance, who both completed a brace of deals just before the 3rd. PSC Insurance Group acquired Leicester-based commercial broker Abaco Insurance Brokers and specialist arboriculture broker Trust Insurance Services, while Clear Group completed deals for chartered brokers and fellow Brokerbility members Luker Rowe & Co. and HIA International.

Several other commercial broking consolidators were also active. Partners& acquired Bolton-based Ives & Taylor Insurance, PIB Group acquired financial lines MGA Acquinex, Specialist Risk Group purchased specialist taxi broker Emrose Insurance Brokers, and Towergate acquired the retail arm of AFL Insurance Brokers. Global Risk Partners acquired Leeds-based Lawrence Fraser Brokers and, via its hub business DCJ Group, J E Sills & Sons. Howden Broking continued its recent run of deals with the acquisition of Sturge Taylor & Associates (STA Group), an independent superyacht broker. Xenia Broking Group, the credit insurance arm of Nexus Underwriting, announced it had agreed to acquire Status Credit Insurance Brokers, a specialist trade credit broker based in East Sussex, and London-based Costero Holdings acquired Lloyd’s broker Mar Risk Services (MarRS).

In two notable personal lines transactions, ex-Aviva CEO Mark Wilson’s Abacai Group announced that it had acquired temporary motor insurer Dayinsure, and Atlanta Group (part of Ardonagh) announced that it had acquired Marmalade, a specialist telematics broker catering for learners and young drivers.

Finally, acquisitive insurance services business Davies Group announced that private equity firm BC Partners had invested in the business, acquiring a majority stake. Existing investors HGGC and AIMCo announced that they would also remain invested in the business following the deal.

February, 2021

 

There had been a great deal of commentary about the March 3rd Budget precipitating a rush to the exit by private sellers concerned about a hike in the CGT rate. Well, in the event the Chancellor decided not to raise CGT (yet), but judging by the deluge of announced deals over the past month, many private sellers chose not to take on that risk and agreed transactions in advance of budget day. New deals are still being announced on a daily basis and so the cut off date for those below was 5th March.

The busiest of the buyers was Aston Lark, announcing the acquisition of construction-specialists Sennocke International and Build-Zone Survey Services, Scottish commercial broker Bruce Stevenson Insurance, MGA Inet3 (better known as Magenta Insurance), and Bristol-based commercial broker Venture Insurance. The group also extended its presence in the health insurance market with the acquisition of Right to Health and The Health Insurance Specialists. Together these acquisitions will add more than 250 staff to the group, a significant jump up in headcount.

Global Risk Partners was also busy, announcing that it had acquired Suffolk-based construction specialist Five Insurance Brokers, and via Birmingham hub Newstead, commercial broker Alford Burton & Co. More significant however was GRP’s announcement that it had also agreed to acquire Marsh’s UK Networks business, comprising Marsh ProBroker, Bluefin Network and Purple Partnership.

Four other consolidators announced more than one deal during the month. Livingbridge-backed Jensten Group acquired both Sydney Packett & Sons and Advance Insurance Agencies. Ardonagh announced that it had acquired both specialist PI broker Hera Indemnity and M&A insurance broker Hemsley Wynne Furlonge Partners. Specialist Risk Group agreed to acquire trade credit specialist The Channel Partnership and property MGA CLS Risk Solutions. Finally, Synova-backed J.M. Glendinning announced it had acquired both Butterworth Spengler Insurance Brokers in Liverpool and High Net Worth specialist Nowell & Richards Insurance Services in Staffordshire.

Lastly among the consolidator-led acquisitions, PIB Group announced that it had acquired Element Hinton Insurance Brokers in Staffordshire.

Competition for a diminishing number of brokers is only set to become more intense and there was news this month of another PE-backed firm joining the ranks of the consolidators above. Inflexion announced that it had backed an MBO of commercial broker DR&P Group and will no doubt be hoping to emulate the recent success it had with now-realised investment in Bollington Wilson.

In other insurance distribution transactions, Markerstudy announced that it had agreed to acquire Brightside Group, the Anacap-backed business it had previously sought to acquire in 2013, US business Applied Underwriters acquired MGA Concept Special Risks, MGA Avid Insurance acquired construction specialist Incorporated Insurance Group (IIGL), and JC Flowers-backed OneGlobal announced that it had sold Lloyd’s Broker SSL Insurance Brokers back to former owner Andrew Sturdy, via his newly formed company Sturdy AGI Holdings.

Lastly, insurer AXA XL confirmed that it had agreed to sell its UK private client business to Aviva, which has been busy divesting a number of its overseas operations as it seeks to focus on a smaller number of core markets.

January, 2021

 

2021 got off to a busy start for Insurance M&A with 13 announced transactions, including a number of high-profile transactions on the distribution side of the market, with two of the major broking consolidators announcing a change of ownership.

Early in the month, Inflexion-backed Bollington Wilson Group announced that it had been acquired by Arthur J. Gallagher in a transaction valued at more than £200m. Less than a fortnight later it was the turn of PIB Group, which announced that it had undertaken a secondary PE deal, with funds managed by Apax Partners acquiring the business from Carlyle (who will remain invested as a minority shareholder) in a deal valuing PIB at more than £1bn.

In another high-profile deal in the month, leading motor insurer Markerstudy announced that it had taken a £200m investment in a deal led by Pollen Street Capital. Markerstudy completed its acquisition of the Co-op’s underwriting business at the end of 2020.

The month also saw a continuing flow of smaller commercial broking deals, with activity largely driven by the broking consolidators. Global Risk Partners acquired Birmingham-based commercial broker Newstead Group and, via its healthcare hub Premier Choice Healthcare (PCH), a book of healthcare business from SJA International. PIB Group acquired construction specialist UK & Ireland Insurance Services. Finch (part of Ethos) acquired Compass network member Headley Group, while Finch’s ultimate parent Ardonagh separately acquired PI specialist and Lloyd’s broker Hera Indemnity. Finally, US firm AssuredPartners announced that it had acquired Scottish broker Borland Insurance, and Heath, Crawford & Foster acquired both ABA Insurance Services and Bradshaw Bennett.

There was also continuing M&A activity among MGAs. Specialist Risk Group announced that it had acquired building & construction specialist GB Underwriting, and Newcastle-based Generation Underwriting Management was acquired by Arden UW, part of Willis & Company (the privately owned business based in Northern Ireland, not to be confused with the other Willis ..).

Lastly, loss adjuster Woodgate & Clark announced that it had acquired Manchester-based Quadra Claims Services.