Willis Completes HRH Acquisition

October 1, 2008

Willis Group Holdings Limited has completed its $2.1 billion acquisition of Hilb Rogal & Hobbs Company (HRH), one of the world’s largest insurance and risk management intermediaries. The move doubles Willis’ revenues and geographic presence in North America and strengthens key practice areas, the company said.

Willis announced a definitive agreement to acquire HRH – the largest such transaction in the insurance broking industry over the last decade – on June 8, 2008.

The addition of HRH expands Willis’ local presence from 70 to 210 locations in North America, and strengthens the company’s position in a number of important U.S. markets. Willis is now among the top three brokers in 15 of the 20 largest U.S. markets, up from only five of those markets previously.

The acquisition also expands Willis’ middle-market and large-account presence, more than doubles its North American revenues in employee benefits and triples its personal lines business. Real estate, health care, environmental, construction, complex property and executive risk are among the other key practice areas bolstered by the acquisition. In addition, HRH’s successful business model serving small and medium enterprises, when combined with Willis’ existing platform developed through its 2007 acquisition of InsuranceNoodle, will drive even more growth and profitability in the commercial segment, which represents upward of 75 percent of the combined companies’ total number of clients.

“Our combination with HRH transforms our North American operations into a larger, stronger and more diverse business with greater growth potential than ever before,” said Joe Plumeri, chairman and CEO of Willis. “Not only is this a ‘win’ for our shareholders and Associates, this combination is great for our clients,” Plumeri added.

Outside of North America, the combination strengthens Willis’ position in the London market, the company said in a statement. In particular, the addition of HRH’s Glencairn business, which will operate under its existing name as part of the newly formed Faber & Dumas entity, creates a new capability and a new growth opportunity for the company as a third-party wholesale broker.

Known as Willis HRH
Following the completion of the acquisition, the retail operation of Willis North America will be known as Willis HRH.

The unit, which encompasses the retail operations of the combined companies in North America, is led by an Office of the Chairman that includes Don Bailey, chairman and CEO; Mike Crowley, president, and Mell Vaughan, vice chairman of Willis Group Holdings.

Bailey was formerly CEO of Willis North America, Crowley was previously president and chief operating officer of HRH, and Vaughan was formerly chairman and CEO of HRH.

Other key leaders of Willis HRH include Vic Krauze, chief operating officer; Derek Smyth, chief financial officer; Joe Gunn, chief growth officer, and Leslie Nylund, chief marketing officer.

“This combination is a great strategic fit, and it puts us in the perfect position to serve our clients like never before with the best resources and professional talent in the industry,” said Bailey.

“We’ve made a great deal of progress over the last four months, working together very closely on integration planning,” added Crowley. “We expect the integration of these two businesses will proceed very smoothly, and it will be a seamless transition for our clients.” Crowley added clients will only notice a broader range of capabilities and talent due to the merger.

As the eighth-largest insurance broker in the U.S., HRH generated $800 million of revenues in 2007, with $57 million of that coming from its international operations based in London.

With the addition of HRH, Willis’ annual revenues expand from $2.6 billion in 2007 to $3.4 billion on a pro forma basis. The combination also positively rebalances Willis’ overall business mix. North American revenues go from 30 percent in 2007 to 45 percent of the company’s total on a pro forma basis. Along business lines, the combination boosts employee eenefits from 10 percent of overall 2007 revenues to 13 percent on a pro forma basis, while reinsurance goes from 15 percent of revenues in 2007 to 12 percent, pro forma, in the combined company.

Source: Willis Group Holdings,

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