Broker carousel settles after frantic 18 months

Over the past 18 months the merry-go-round of senior broking personnel has been spinning at a frantic pace as companies jostle for position, with Aon’s (now aborted) plans to acquire Willis Towers Watson (WTW) leading to an unprecedented period of movement in the market.

Senior executives, groups, whole teams and in some instances entire businesses have moved from one firm to another amid the fallout from consolidation among the market’s largest players.

Aon’s plans to acquire WTW first became public in March 2019, with the two companies agreeing terms on a transaction a year later. The deal, which was terminated in July amid struggles to secure US antitrust approval, would have seen Aon retake the (re)insurance broking top spot it had lost through Marsh McLennan’s purchase of JLT Group.

Some view that deal – announced in September 2018 and completed in April the following year – as the initial spark for the period of movement which has since transpired.

Rival intermediaries have used the uncertainty arising from the major transactions to capitalise on the opportunity to attract personnel.

More than 16 months passed from the announcement of the Aon-WTW deal to its termination on 26 July this year, a period which saw unprecedented broker personnel movement amid uncertainty around the divestment of assets to secure regulatory approval.

Companies such as Arthur J Gallagher, Lockton, Howden, NFP and others have all taken advantage of the inevitable fallout that such a significant combination would bring.

Marsh McLennan has also used the uncertainty to further strengthen its position. During the group’s Q2 2021 earnings call, president and CEO Dan Glaser said his company had increased headcount by almost 2,000 during the first half of this year as it took advantage of opportunities arising from ongoing uncertainty around the Aon-WTW combination.

Glaser revealed Marsh McLennan had seen the number of hires from its two biggest rivals jump threefold on a net basis in the period since the Aon-WTW deal was announced in March 2020. 

Some exits were driven by a lack of enthusiasm to work for an enlarged Aon-WTW for reasons including concerns about culture, whether they would be able to keep working with their clients and, in some instances, because they did not want to return to a company they had previously been employed by and may have departed on less than amicable terms.

Big three shifts

And so the market is now reflecting on an environment where a big three remains, but in very much changed circumstances, and where many of the broking sector’s major players – both in the insurance and reinsurance space – have strengthened certain parts of their operations at the expense of rivals.

The most notable example of such strengthening is at Gallagher, which is set to acquire  reinsurance broking arm Willis Re from WTW in an initial $3.25bn deal with a $750mn additional consideration payable should certain conditions be met.

There have been several other significant personnel movements. Just three months after the Aon-WTW combination was confirmed, a host of reinsurance and retro-focused staff from Aon – including London-based Jeremy Lee and Matt Foreman along with Jonty Davies, Robert Bisset and Thomas Parcell in Bermuda – resigned before teaming up at Lockton Re, the reinsurance broking platform that was rebooted by its US retail-focused parent with the hire a trio of senior executives led by Tim Gardner from Guy Carpenter.

Florida (re)insurance broking market altered

Florida has seen perhaps the most significant (re)insurance broking personnel movements.

Guy Carpenter’s hire of a 25-plus strong team of Latin America and Caribbean-focused Willis Re executives, including Tony Phillips and Cameron Roe, in November last year was the first major team move that arose in the aftermath of the Aon-WTW combination being announced.

Shortly after those moves came to light, WTW’s Central America and Caribbean facultative CEO Tony Matta left to join Lockton’s expansive operation in the region.

WTW also saw a group of 25 Florida-focused Corporate Risk & Broking (CRB) staff led by producer Fred Zutel quit to join Lockton.

Zutel, one of WTW’s highest grossing sales executives and regarded as a “rising star” within the US market, had served as the broker’s CRB market leader in Florida for several years despite only being in his mid-30s.

Also in Florida, Aon’s long-serving head of the East Coast region Michael Parrish and over 40 of his Sunshine State-based colleagues resigned to join rival Marsh.

All three of those moves prompted a wave of litigation from the companies that saw their staff depart, and The Insurer understands that only one of those cases – Zutel and his colleagues’ move from WTW to Lockton – has been settled.

Other notable exits from WTW have taken place further north, with over 20 staff leaving to join NFP’s fast-growing insurance broking business in Canada.

WTW Canada’s former president and CEO Brian Parsons left the business back in May to join BFL Canada to head up its national risk management division. Several other senior WTW Canada business leaders have since also made the move.

Howden ramps up

Broker personnel movement has not been confined to moves involving Aon and WTW. Howden has notably made a series of raids on both Marsh and Guy Carpenter as it builds out its insurance and reinsurance broking operations.

Late last year, Howden recruited some 15 producers and senior management from Marsh Australia to spearhead its own nascent operation in the country. Among those to move across were Matthew Baker, Stuart McKellar and Nick Chubb, The Insurer revealed at the time.

This was followed by Howden’s hire of a swathe of executives from Guy Carpenter, led by Bradley Maltese, to front its expansion in the reinsurance broking space.

To date, more than 30 reinsurance broking staff including property-focused Dean Smith and Paul Esterbrook, casualty specialists George Harris Hughes and Mike Lambert, capital advisory leads Vijay Mavani and David Watson and aviation and space experts Paul “Sid” Smith and Tony Johnston, among others, have left Guy Carpenter for Howden.

Unsurprisingly, Guy Carpenter has responded to Howden’s wholesale hiring of its staff by taking its rival to court, as previously reported by this publication. The two reinsurance brokers are currently in the midst of a legal battle over the moves.

July saw a flurry of moves take place before the Aon-WTW combination was scrapped, with recent weeks seeing movement dampen down.

Should another major combination occur – and there is considerable belief in the market that it will – then the expectation is there will be yet more widespread (re)insurance broking movement, with the carousel gearing up for another turn.