Monthly M&A Reviews
Join our distribution list
to get M&A monthly reviews via email
2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

October, 2020

October was another active month for UK Insurance M&A with 14 new transactions being announced among brokers, insurers and MGAs. Six of these deals involved a private equity-backed broking consolidator, again highlighting what a large proportion of current sector M&A activity is being driven by a relatively small number of buyers of (mainly) commercial lines broking business.

Dealing first with those consolidators, GRP’s new Midlands ‘hub’ business Birrell Group (which trades as Kingsway Insurance Services) announced two acquisitions, acquiring both Northamptonshire-based Managed Risk Solutions (MRSL) and Home Counties Insurance Services (HCIS) in Bedfordshire. In addition, GRP’s Yorkshire hub business Marshall Woolridge acquired Messrs R F Broadley, a long-established family owned broker in Masham. Fellow consolidator PIB Group announced two new deals in the month, acquiring real estate and PI specialist Arlington Insurance Services and Leicester-based Erskine Murray Insurance Brokers, the latter of which employs 90 staff and marks the group’s largest acquisition this year. Finally, Aston Lark announced it had acquired Birmingham-based broker Dunsby Associates in a deal that will help to build out the group’s presence in the Midlands.

Elsewhere in broking, A-Plan announced that it had acquired telematics business Ingenie from Watchstone Group and essential business services group Verastar acquired building insurance specialist LittleNLarge in a deal that will expand Verastar’s range of services for SMEs.

There were three deals announced among MGAs, including transactions for books of business. Pioneer Underwriting disclosed that it had signed terms to sell the business to Russell Coward, its head of Risk & Compliance, in a move that will see Pioneer CEO Andrew McMellin step down and the business rebranded. Manchester Underwriting announced that it had acquired the renewal rights of PI specialist Pinpoint Underwriting and would add Pinpoint’s team and Perth office to the group. Finally, Ardonagh-owned Geo Underwriting announced that it had completed the acquisition of the marine, leisure and marine trade book of business from KGM Underwriting Services.

Among insurers, Tesco Bank confirmed it had reached agreement with joint venture partner Ageas UK to buy Ageas’s 50.1% stake in Tesco Underwriting to give it full control over the business in a deal that was first flagged almost 12 months ago. Aegon announced it will divest the UK arm of its accident insurance business Stonebridge Insurance to Global Premium Holdings, part of the Embignell group of companies that also includes Union Income and Union Insurance. Lastly, the steady flow of legacy deals that has been a prominent feature of sector M&A this year continued with the announcement that ArgoGlobal had reached an agreement around an RITC transaction with legacy specialist RiverStone in respect of Lloyd’s Syndicate 1200.

August, 2020

 

In last month’s newsletter we commented that August can often be a quiet month for M&A, as people disappear for the summer. Well, that was clearly utter rubbish, as this August has seen a slew of announced Insurance deals, mainly on the distribution side but also involving risk carriers.

In broking, there were ten announced deals in the month and with only one exception, the buyers were all what one might regard as the “usual suspects”, which is to say the private equity-backed consolidators that have come to dominate these newsletters.

Aston Lark announced two new deals during the month, acquiring both specialist employee benefits business Private Healthcare Managers, or PHM, and Lloyd’s broker Incepta Risk Management, furthering the group’s existing footprint within the London Market.

Also announcing two new deals was Ethos Broking, which announced the acquisition of Broker Network member Guy Penn & Co. in the North West and, via hub broker Bennett Christmas, Sennet Insurance Services, a commercial broker in Kent.

Global Risk Partners managed to go one better, with three new deals. Two of these were via hub business County Group, which announced the acquisitions of Britannia Consultants Services in Cheshire and CJN Insurance services in Worcestershire, and the third directly by acquiring the renewal rights on seven books of business from Aon UK.

Not to be outdone, PIB Group announced the acquisition of transport specialist Rigton Insurance Services in Leeds and the increasingly prolific Bollington Wilson acquired Watson Laurie, a chartered broker based in the North West.

The one broking deal not involving a PE-based consolidator was Costero Brokers’ acquisition of fellow Lloyd’s broker Prospect Insurance Brokers. Costero is part of the Heffernan Insurance Brokers, a Californian employee owned business, demonstrating that UK broking M&A is not quite yet the sole preserve of the handful of serial acquirers discussed above.

There was one MGA transaction, with Ardonagh announcing the acquisition of construction specialist Thames Underwriting.

Among insurers, we noted last month that Finnish group Sampo was leading a pursuit of listed motor insurer Hastings Group. In early August Hastings, announced that its board had recommended a cash offer for the business that valued the group at £1.66bn. There were also two deals for insurers in run-off during the month. Randall & Quilter announced that it had agreed a deal to acquire Inceptum Insurance Company from the Vibe Group of companies and Allianz announced that it had divested the British Reserve Insurance Company to newly formed Marco Capital Holdings, a Malta-headquartered run-off specialist backed by, among others, Oaktree.

July, 2020

There were a number of notable deals in the Insurance sector, with both distribution-led businesses and selected risk carriers involved in M&A.

Among the private equity backed broking consolidators, PIB Group announced the acquisition of Stockton-based Internet Insurance Services UK, trading under the slightly snappier name of UKInsuranceNet, Livingbridge-backed Jensten Group announced its second deal of the summer with the acquisition of PI specialist HTC Associates, and Aston Lark continued its drive to build out the employee benefits side of its business with a deal to acquire Hampshire-based specialist Private Healthcare Managers (PHM).

In other broking deals, S&G Risk Solutions (a new vehicle led by former Property Insurance Initiatives CEO Brett Sainty) announced the acquisition of Lloyd’s broker BLW Insurance Brokers and personal lines broker Brolly was picked up by Direct Line Group. App-based digital broker Brolly is a relatively young startup business and is one of an increasing number of early-stage insurtech businesses to be acquired by large incumbents choosing to selectively buy the sort of innovation that they can often struggle to foster internally.

Finally, listed motor insurer Hastings Group announced that it was in discussions about a possible cash offer from Sampo, the Finnish insurance group, working alongside Rand Merchant Investment Holdings (RMI), an existing major shareholder in the business. With the FTSE 350 (and Sterling) still down heavily for the year, it is perhaps not a surprise to see that overseas buyers and institutional investors are looking at public to private opportunities in the UK market.

June, 2020

After what was an eerily quiet May for deals, insurance M&A volumes notably picked up in June, with a number of broking and MGA deals being announced. Although the number of transactions remains some way below the long-term monthly average, deals are still being done and there are tentative signs of a return to some semblance of “normality”.

In commercial broking, Durham-based Castle Insurance Services announced it had acquired EW Knapton, Ethos-owned Bennett Christmas acquired energy broker Offshore & Marine Insurance Services (OMIS) and Thompson & Richardson (also an Ethos partner broker) acquired Scunthorpe-based Johnstone Insurance Brokers. As we have remarked before in this newsletter, the Ethos hub-and-spoke based approach has proved very effective in allowing the group to facilitate a large number of small acquisitions and we would anticipate continuing to report on one or other Ethos backed broker making a new acquisition in most of our monthly M&A newsletters for the foreseeable future.

Ethos was itself the subject of a headline-grabbing transaction during the month, with the (frankly unsurprising) news that Bravo Group – the owner of Broker Network, Ethos and Compass – was to be acquired by Ardonagh. Ardonagh simultaneously announced it had undertaken a refinancing of its debt and acquired Irish broker Arachas. As Ardonagh, Arachas and Bravo were already under common ownership by US private equity investors this transaction was largely constituted a reorganisation rather than “new” M&A activity.

In other deals, personal lines MGA UK General was reacquired by its former owner Primary Group following a three-year period of ownership by private equity investor JC Flowers & Co. JC Flowers will probably not count it as one of their more successful investments. Miles Smith owner Specialist Risk Group continued its recent run of deals by acquiring insolvency specialist AUA Insolvency Risk Services from insurer MS Amlin and Livingbridge-backed Jensten Group (née Coversure) acquired Lloyd’s broker Senior Wright.

May, 2020

As May took the UK into the third full calendar month of lockdown it will come as no surprise that the number of announced M&A deals fell dramatically. Indeed, the biggest Insurance M&A story of the month was about a deal that didn’t happen – with French insurer Covea announcing that it was pulling out of a previously agreed $9bn deal to acquire PartnerRe, despite having publicly said it was committed to the transaction just a few weeks earlier.

The coronavirus pandemic is clearly having a major impact on the insurance sector and with Lloyd’s of London announcing during May that it expects to pay out £3.5bn in claims as a result, it came as little surprise to see two of its largest insurers raising new capital. Embattled insurer Hiscox announced a share placing to raise £375m and was quickly followed by Beazley, who raised £247m through a placing.

There was again M&A activity within the MGA segment, with London-based platform OneAdvent announcing the acquisition of Modus Underwriting from CFC Underwriting. Modus is a digital-first MGA providing niche property insurance.

Within insurance distribution, M&A activity was very limited. Towergate announced two small transactions that it had agreed earlier in the year, acquiring Chippenham-based farm insurance specialist Edwards & Swan Insurance Brokers and a separate deal to buy the book of Education Staff Absence insurance business from Integro Insurance Brokers. The cash consideration in both deals was less than £1m.

Within Insurance services, credit-hire and post-accident services provider Edam Group acquired motor claims business Kingsway Claims.

Lastly, there was continuing financing activity within Insuretech, with a number of high-profile firms raising new capital and demonstrating the continuing appetite among VCs for disruptive insurance business, particularly in personal lines. Innovative pet insurance business Bought By Many announced that it had raised a further £78m of growth equity, cycle insurance specialist Bikmo raised £1.8m in a Series A round that saw participation from insurer Hiscox, and pay-per-mile startup By Miles added £15m in a Series B funding round led by CommerzVentures, the corporate venture capital fund of Germany’s Commerzbank Group.

April, 2020

It will perhaps come as little surprise given how much of the economy was either closed or curtailed for the month that there was a sharp decline in the volume of announced Insurance M&A in the month, with only a fraction of the number of transactions seen in a ‘typical’ month (there was just one deal with a value estimated at more than £5m in April, against a monthly average of 2.4 deals in this size range in the sector over the past five years). It remains to be seen how long this might continue, but while we remain in lockdown and until there is greater certainty around the economic outlook, we would expect Insurance M&A volumes to remain subdued. With a large number of ongoing transactions currently paused or just having slowed down, any return to some semblance of normality could well see a quick uptick in announced deals.

Among commercial brokers, two of the ‘hub and spoke’ based consolidators announced further deals, with Global Risk Partners hub business Green Insurance Group acquiring Brighton-based broker RT Williams Insurance Brokers and its appointed representative NIB Insurance Brokers, and Ethos Broking added another deal with the acquisition of Compass member Hughes & King.

Elsewhere, troubled motor broker and MGA Staveley Head, which went into administration earlier in the year, was acquired by One Sure Insurance and US MGA consolidator K2 Insurance Services, a portfolio company of McLarens backer Lee Equity Partners, made its largest overseas acquisition to date with an agreement to acquire selected underwriting business units from Pioneer Underwriting. The acquired business covers property catastrophe reinsurance, financial institutions, international property facultative and marine specialty and is expected to write c.£150m GWP in 2020.

March, 2020

Perhaps counterintuitively given the current disruption, but March was actually a busy month for announced M&A deals in Insurance. This of course reflects a lag effect and the fact that most deals take months to agree – the deals announced in March will have been largely ready to go before the full extent of the impact of coronavirus on the UK became apparent. The impact on M&A levels will only really become clear over the coming months and with many deals being pulled or paused, we would anticipate 2020 deal volumes to be considerably lower than 2019.

Amidst the chaos of a crashing stock market, the largest ever insurance broking transaction was announced, with Aon and Willis combining in an all share deal to create a $80bn leader that might reshape the global broking market in the coming years. On the basis that the transaction is a nil-premium all-share merger, the falling share prices of both companies have less of an impact than if it was a cash deal or Aon (the larger partner) was paying a conventional premium to acquire Willis.

Elsewhere in UK broking, the private equity backed consolidators continued to announce new acquisitions. A number of these businesses use a ‘hub-and-spoke’ model through which their own ‘hub’ brokers make smaller acquisitions, allowing a greater volume of deals to be done than if every deal was done from the centre. The two most prominent of these are Global Risk Partners (GRP) and Ethos Broking, who were both active. GRP commercial broking hubs Sagar Insurance and Green Insurance Group announced acquisitions of East Sussex-based Manor Insurance and Anderson Ashcroft in the North West, respectively. Ethos announced the acquisition of Perry Appleton in Rugby and – via their Saffron Insurance hub – Romford-based C&M Insurance.

Several other broking consolidators also remained active – PIB Group announced the acquisition of  RA Insurance Brokers in Croydon, adding to its existing strength and expertise in Motor Trade business, Hg Capital-backed A-Plan acquired Northampton-based commercial broker Cotters Insurance Brokers, Ardonagh added to its existing expertise in the agricultural sector with the acquisition of Rural Insurance Group, and Xenia Broking Group – the broking arm of MGA consolidator Nexus Group – acquired the UK trade credit business of Howden UK. Keeping somewhat below the radar, former Jelf CEO Phil Barton also continued to make acquisitions, taking control of CGI Insurance in Staffordshire. Companies House filings revealed that fellow industry luminary Stuart Reid and the private equity partners that previously backed Barton at Jelf are also involved in the new initiative.

In other deals, Dunedin-backed Kingsbridge Group, which offers insurance products for contractors, announced that it would be acquired by US-based NSM Insurance, which already owns Vantage Insurance in the UK, Sam White’s Freedom Services Group announced the acquisition of home insurance specialist Homelyfe, Sutton Winson acquired Kent-based Flexible Health Insurance Brokers, ReSolution Underwriting acquired Trilogy Managing General Agents from Randall & Quilter, and MGAM, a platform-based MGA offering products for SMEs was taken over by Beach & Associates, itself part of US broker Acrisure.

In Insurance technology, policy management platform provider Instanda announced it had raised $19.5m in a Series-A capital raise led by Assembly Capital Partners.

Lastly, a notable deal was announced between carriers with the announcement that French insurer Covea is to acquire EXOR-owned PartnerRe in a $9bn deal. The transaction was announced early in the month but Covea has recently confirmed it remains committed to the deal, in spite of the ongoing market disruption.

February, 2020

After what was a very busy January for sector M&A in general insurance, February was much more muted with fewer than a dozen UK transactions announced. The landmark deal in the month was of course Searchlight Capital’s investment in broking consolidator Global Risk Partners, which was announced early in the month and we reported on in the January newsletter.

In broking, Bollington Wilson announced two acquisitions, picking up Harrogate-based trade credit specialist Prophet Trade Credit and Sutton Coldfield-based commercial broker CLA (Risk Solutions). Private equity firm Inflexion first backed the buyout and merger of Bollington and Wilsons in November 2017. It made no acquisitions during 2018-19 but has already announced three deals during 2020.

In personal lines, current consolidator of reference Ardonagh acquired motorcycling specialist Bennetts from Saga for a reported £26m, the same price Saga was reported to have purchased the business for when it acquired it from BGL Group in 2015. Ardonagh already owns motorcycle specialist Carole Nash. Family-owned N&W Investment, the owner of High Net Worth specialist Stanhope Cooper and MGA Renovation Underwriting, acquired London-based Insurance Tailors, adding around £2.5 million of GWP.

Among the PE-backed consolidators serial acquirer PIB Group announced its 26th deal with the acquisition of Croydon-based BK Insurance Brokers, an independent brokerage focused on the property, corporate, private clients and SME sectors, and ECI-backed Clear Insurance acquired Light Indemnity Solutions, a London-based right to light specialist.

In Insurtech, there were three notable UK fundraising transactions with data & analytics business Concirrus raising $20 million in a Series B round, subscription-based SME broker Digital Risks securing $10.4 million and AI business Tractable adding $25 million in a Series C round.

January, 2020

The new year got off to a relatively lively start, with January seeing a number of transactions involving mainly commercial lines businesses at the smaller end of the size spectrum and one major deal as a consolidator was sold to a new private equity backer. In 2019 there was a marked increase in the number of smaller M&A transactions (values less than £5 million) in the sector, as consolidators faced up to a reduced supply of suitable mid-sized targets and instead targeted smaller businesses – we expect this trend to continue in 2020.

Among the broking consolidators, Global Risk Partners announced that it had acquired Leicestershire-based the Birrell Group to act as a new Midlands hub, Finch (itself part of Ethos) bought Richmond-based Shene Insurance, Broker Network-owned Lockyers acquired Bernard Saxon General Insurance Services (BSIS) and Aston Lark announced the acquisition of Isca Barum, an Exeter-based broker best known for its specialism in farm and smallholding insurance.

It was announced at the beginning of February that Global Risk Partners had itself changed ownership, following the acquisition of a majority stake in the business by Searchlight Capital Partners, providing further capital to support their continuing acquisition strategy.

In other broking deals, Somerset Bridge Insurance (the artist formerly known as Eldon Insurance Services …) sold Business Choice Direct, its SME and tradesman specialist, to Lloyd & Whyte. This was one of two acquisitions by Lloyd and Whyte during January, which also saw them take over control of property wholesale specialist Stride Insurance. Elsewhere, ex-Jelf CEO Phil Barton’s MRIB combined with La Playa, and Inflexion-backed Bollington acquired Ashgrove Insurance Services.

In personal lines, specialist motor broker Complete Cover Group was reported to have been sold to Sun Capital Partners, giving the business (which was formerly Allen & Allen) a new Private Equity backer almost eight years to the day since it was acquired by Darwin Private Equity.

Among insurers, Zurich-owned Navigators & General acquired a book of marine trade business from NMU; and Ecclesiastical Insurance (which also owns brokers Lycetts and SEIB) was revealed to have acquired a minority interest in the aforementioned Lloyd & Whyte.

In Insurance Services, acquisitive claims specialist Davies announced that it was moving into the legal services sector with the acquisition of Keoghs, an insurance-focused law firm.

Finally, underwriting agent CFC Underwriting announced it had acquired ThreatInformer, a business providing data to support brokers, underwriters and reinsurers in the Cyber market, Optio (the owner of Ascent Underwriting and Cove Programs) acquired Newbridge Risk Partners from Castel Underwriting, and Coverys European Holdings, an agency platform in the professional lines market, announced that it had acquired Italian MGA and Lloyd’s coverholder AEC Wholesale Group.