AJG to acquire the treaty reinsurance brokerage of WTW
Arthur J. Gallagher announced an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson plc. The transaction is expected to close during the fourth quarter of 2021.
“Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher and this acquisition will significantly enhance our global value proposition. We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects. I look forward to welcoming the 2,200 new colleagues joining us as part of this transaction to our growing Gallagher family of professionals.” – J. Patrick Gallagher, Jr., Chairman, President and CEO.
Benefits of the acquisition are expected to include:
- Expanded global value proposition within reinsurance brokerage
- A broad suite of analytics capabilities including actuarial services, catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
- Addition of talented management team
- Increased product breadth & offerings
- Further leveraging of Gallagher’s industry-leading alternative risk and ILS business
- Strengthened relationships with major insurance carriers
Acquired Operations
The operations include all of Willis Re’s treaty reinsurance brokerage operations. For the year ended December 31, 2020, these operations generated $745 million of estimated pro forma revenue and $265 million of estimated pro forma EBITDAC. The pro forma 2020 figures include revenues reported in Wills Re’s 2020 unaudited financial information, and reflect known growth, as well as Gallagher’s estimate of “breakage”, defined as known lost business and the departure of key brokers and other employees, as well as normalization of operating expenses and additional investments. Willis Re’s treaty reinsurance business operates in 24 countries, places over $10 billion of premium annually and represents over 750 insurance and reinsurance company clients.
