The top M&A story of 2020 was more a global than national story but it captured more readers in every geographic location than any other. Since it was first announced in March, the proposed Aon-Willis merger remained the leading merger and non-merger insurance story for the entire year. But there were also other proposed and completed transactions that caught the eyes of Insurance Journal’s Midwest audience. Here are the most popular M&A reports of interest to Midwest readers in 2020:
Global insurance brokers Aon and Willis Towers Watson in March announced they had agreed to merge in an all-stock transaction with an implied combined equity value of approximately $80 billion. Upon completion of the combination, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis. According to S&P, Aon intends to combine with Willis in an all-stock transaction valued at about $30 billion, with Willis shares being exchanged to Aon shares. The combined company will be named Aon. Combined the companies have more than $20 billion in revenue. Aon reported $11 billion in revenue with $2.2 billion net income for 2019 compared to $9 billion revenue and $1.4 billion net income for Willis Towers Watson. Aon will maintain operating headquarters in London, United Kingdom. The parent company will be incorporated in Ireland. The combined firm will have 95,000 employees globally, with what the announcement said will be a “significant presence” in Chicago, New York and Singapore. John Haley will take on the role of executive chairman with a focus on growth and innovation strategy. The combined firm will be led by Greg Case and Aon Chief Financial Officer Christa Davies. The board of directors will comprise proportional members from Aon and Willis Towers Watson’s current directors. In December Aon confirmed that the European Commission has initiated a review of the proposed merger. Aon said the review is a common next step “for a transaction of this size and complexity” and said it remains on track to close the deal in the first half of 2021.
U.S. insurer Allstate Corp. plans to buy National General Holdings Corp. for about $4 billion in cash, scaling up its auto insurance business at a time when the coronavirus has crushed traffic on roads and reduced claims. The deal announced in July implies a total deal value of $3.92 billion and a premium of, Reuters calculations showed. New York-based National General provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. Auto insurance represents approximately 60% of premium with a significant presence in the non-standard auto market. “Acquiring National General accelerates Illinois-headquartered Allstate’s strategy to increase market share in personal property-liability and significantly expands our independent agent distribution,” Allstate Chief Executive Officer Tom Wilson said. National General has approximately 42,300 independent agents. Allstate will become a top 5 personal lines carrier in the independent agent distribution channel by combining Encompass and Allstate’s Independent Agent businesses with National General.
State Farm Mutual Automobile Insurance Co. is acquiring Dallas-based nonstandard auto insurer, GAINSCO, in a $400 million cash transaction reported in September. It will be the first time in State Farm’s 98-year history that it has acquired an insurance company. GAINSCO specializes in minimum-limits personal auto coverage and actively distributes its nonstandard personal auto products through independent retail agents in Arizona, Florida, Georgia, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Ohio and Alabama. Its insurance operations are conducted through its subsidiary, MGA Insurance Company Inc., a Texas corporation.
Marsh subsidiary Marsh & McLennan Agency LLC (MMA) has acquired Schaumburg, Illinois-based Assurance Holdings Inc. Founded in 1961, Assurance is a full-service brokerage providing business insurance, employee benefits, private client insurance, and retirement services to businesses and individuals across the country. It ranked 29th on Insurance Journal’s list of the Top 100 Independent Agencies in 2019. Assurance will operate as the Midwest regional headquarters for MMA under the leadership of Anthony (Tony) Chimino, CEO of Assurance. Chimino will report to David Eslick, chairman and CEO of MMA. Assurance’s 525 colleagues will join MMA and continue to work out of their Schaumburg and Chicago, Illinois, offices.
Specialty insurance brokerages Ryan Specialty Group and All Risks in September closed on the merger the two firms into Ryan Specialty Group. The deal unites Chicago-based Ryan Specialty Group and its nearly $12 billion in premium, and All Risks, headquartered in Delray Beach, Florida, which has close to $2.6 billion in premium. The combination will have roughly 3,300 employees and more than 70 offices across the United States, the United Kingdom and Europe. Only AmWINS and CRC Insurance Services are larger than RSG and All Risks in the wholesale brokerage space.
Daytona Beach, Florida-based insurance broker Brown & Brown Inc. terminated its Daytona Beach, Florida-based insurance broker Brown & Brown has terminated its previously announced agreement to purchase the assets of HAUSER, an insurance and investment firm headquartered in Cincinnati. Brown & Brown announced the termination of the agreement with Hauser on Aug. 25, just days after it was reported that one of Hauser’s principals, Mark Hauser, agreed to enter a guilty plea in the college admissions scandal that has embroiled a number of high-profile parents, including actresses Felicity Huffman and Lori Laughlin, and Laughlin’s husband, fashion designer Mossimo Giannulli. The Associated Press reported on Aug. 21, that Mark Hauser, who is based in California, had agreed to plead guilty in a scheme in which he paid $40,000 to rig his daughter’s ACT exam. Brown & Brown’s deal with Hauser was expected to close in September. The agency was founded 50 years ago by the Hauser family and continues to operate from its headquarters in Cincinnati, Ohio, led by James Stines.
Chicago-based specialty insurer Kemper Corp. in November said it had agreed to acquire American Access Casualty Co, and its related captive insurance agency, Newins Insurance Agency Holdings and its subsidiaries. AAC is headquartered in Downers Grove, Ill. The $370 million transaction is expected to close in the first quarter of 2021. AAC provides specialty private passenger auto insurance in Arizona, Illinois, Indiana, Nevada and Texas. AAC wrote $370 million of direct premiums in 2019 through 500 independent agents and 110 captive agents. AAC’s multi-channel distribution strategy, agency relationships, and deep ties to the markets it serves — particularly Hispanic communities — have driven consistent profitability.
AssuredPartners Inc. acquired Corkill Insurance Agency Inc. of Elk Grove Village, Illinois, in January. AssuredPartners said the Corkill acquisition is its first in 2020. The Corkill staff of 104 will remain under the operational leadership of Luke Praxmarer and Paul Praxmarer. The agency currently reports $23 million in annualized revenues.
Cleveland, Ohio-based CBIZ Inc., a provider of financial, insurance and advisory services, acquired substantially all of the assets of independent insurance agency Alliance Insurance Services Inc. of Washington, D.C. in February. AIS small and midsized clients include charter schools, real estate, construction and technology in the D.C. metro area. AIS has nine employees and approximately $1.6 million in annual revenue.
Traverse City, Michigan-based High Street Insurance Partners acquired three agencies in May — two in Michigan and one in New York. These new agency partners are: Trust Shield Insurance Group in Schoolcraft, Michigan; Ken Bleeker Insurance Agency in Martin, Michigan; and Gates-Cole Associates in New Hartford, New York. High Street, one of 15 Huron Capital ExecFactor initiatives, was created to pursue acquisitions in the insurance agency market.
First MainStreet Insurance (FMSI), a Cedar Rapids, Iowa-based affiliate of TrueNorth Companies, in March closed on its acquisition of three new agencies. The firm expanded to Western Iowa with the merger of EGR Insurance in Moville. A dedicated staff of 10, Pat Rogers and team has been a long-standing predominant player in their region. FMSI also has merged with Warth Insurance in Burlington, Iowa, headed by Mark Warth and his team in southeast Iowa. Continuing FMSI’s expansion in southeast Iowa is the merger of Rominger Insurance in Ottumwa. Tim Hardie and team joined the FMSI platform after agreeing to terms to transition effective March 1. With the acquisition of these three agencies, FMSI increases its total revenue to over $10 million. First MainStreet Insurance is an affiliated business unit of TrueNorth Companies.
One80 Intermediaries, a national wholesale insurance broker and program manager headquartered in Boston, has acquired Beachwood, Ohio-based International Excess Program Managers (IEPM), a wholesale insurance brokerage and program manager operating in all 50 states. Established in 1998, IEPM specializes in property, liability, inland marine, errors and omissions, directors and officers, commercial auto and umbrella coverage. In addition to wholesale access, IEPM builds multi-state insurance programs for specialty industries, associations and groups of policy holders. Services include underwriting, rating structures, policy issuance and regulatory compliance. One80 Intermediaries is a privately held, national firm with offices across the country.
Sompo International Holdings Ltd. (SIH), a Bermuda-based specialty provider of property/casualty insurance and reinsurance, has acquired Lenexa, Kansas-based Diversified Crop Insurance Services (DCIS), a subsidiary of CGB Enterprises Inc. (CGB). DCIS and ARMtech, Sompo International’s existing U.S. federally sponsored multi-peril crop insurer, will now operate under the brand name AgriSompo North America and as a part of the global AgriSompo platform. AgriSompo will be one of the largest crop insurance providers in the United States and the world with combined gross written premiums of over $2 billion, the company’s announcement said.
Brown & Brown of Ohio has acquired substantially all of the assets of Berry Insurance Group in Ohio. Founded in 2002 by Mark Berry, Berry Insurance Group sells commercial and personal insurance throughout the Cincinnati tri-state area. Berry will continue to lead the Berry Insurance Group team operating from their offices in Terrace Park and Lebanon, Ohio. He will report to Tommy Huval, regional president of Brown & Brown Retail. Brown & Brown Inc. is based in Daytona Beach, Fla.
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