JLT Group Expands U.S. Specialty Reach, Merges JLT Specialty, Lloyd & Partners

September 2, 2014

Jardine Lloyd Thompson Group plc (JLT) a global providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services, has expanded its U.S. specialty capabilities and merged JLT Specialty Ltd. and Lloyd & Partners Ltd. to drive a new phase of growth, following its acquisition of Towers Watson Re last year.

JLT’s expansion of its U.S. activities into the group’s specialty areas include: energy; construction; financial lines; credit; political & security; and aerospace (where it already has a U.S. presence).

This company said the decision was driven by the success and growth that JLT has seen in recent years through its specialty-led strategy. The company feels it now has the brand, size, geographic reach, leadership and people to create a truly global specialty business. It also wants to meet the growing requirement from clients to deliver its products on a global scale.

The expansion is in keeping with the company’s goals of furthering its U.S. operations, as evidenced by the acquisition of Towers Watson Re late last, and expanding its U.S. reinsurance ambitions.

Michael Rice has been appointed as CEO and Pat Donnelly president and deputy CEO of JLT Specialty Insurance Services Inc., subject to them fulfilling their existing contractual obligations.

Mark Drummond Brady, deputy group CEO of JLT, and Jonathan Palmer-Brown, a member of the JLT Group executive committee, will become members of the U.S. executive team to support the business’ growth plans and ensure that it is aligned and complementary to the rest of the JLT Group.

The company also intends to appoint a new non-executive director with specific knowledge and experience of the U.S. insurance market to the JLT Group plc Board.

The expansion plan is expected to result in a net investment of approximately $85 million during the period 2015 to 2017. This figure takes account the costs of building out the business and offset by revenues which are expected to build more slowly.

The company expects the majority of this investment will be made in the first two years of the period and that the business will start to contribute to profits in 2018 and then generate an accelerated return thereafter.

The investment will be funded from existing cash reserves and debt facilities and will be fully expensed through the income statement.

Merger of JLT Specialty and Lloyd & Partners

JLT Specialty has also merged with Lloyd & Partners to create a single specialty business that is in line with JLT’s strategy of focusing on its areas of specialization.

The merger is anticipated to position the business for growth:

  • Brings together each business’ leading specialty teams into a single operation.
  • Creates a business of scale and international reach.
  • Provides a cultural, operational and business fit

Subject to the appropriate regulatory approvals, John Lloyd, the current CEO of Lloyd & Partners, will be appointed CEO of JLT Specialty with Adrian Girling, the current chairman of JLT Specialty, being appointed chairman of Lloyd & Partners.

The merger will take effect for reporting purposes from Jan. 1, 2015, at which point John Lloyd and Adrian Girling will become CEO and chairman respectively of the combined business which will trade as JLT Specialty.

The Lloyd & Partners brand will be retained to service and develop the group’s independent wholesale client base. JLT is will work with serving its independent wholesale clients.

There is limited overlap between the two businesses. More details will be provided on the anticipated one-off integration costs and associated savings at the time of JLT’s preliminary results in March 2015.

Dominic Burke, JLT Group CEO, said the merger of JLT Specialty and Lloyd & Partners will bring together the market capabilities into a single business to meet clients’ international demands, pursue JLT’s group strategy and deliver organic growth.

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