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 Southeast audience. Here are the most popular M&A reports of interest to Southeast 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 combined with Willis in an all-stock transaction valued at about $30 billion, with Willis shares being exchanged to Aon shares. The combined company is 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 was 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 took on the role of executive chairman with a focus on growth and innovation strategy. The combined firm is 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.
Two Florida-based homeowners insurers, Anchor Property & Casualty and Anchor Specialty Insurance, succumbed to market pressures in January in the Sunshine State and were acquired by other companies. Tampa, Fla.-based HCI Group entered into a preliminary agreement for its subsidiary Homeowners Choice Property & Casualty Insurance Co. to acquire all the insurance policies of Anchor Property & Casualty Co., according to HCI.
In December, Charlotte, N.C.-based Truist Insurance Holdings reported that it would complete five insurance acquisitions the fourth quarter, adding more than $100 million of combined annual revenue to its wholesale division. The most recent of these transactions was the acquisition of Wellington Risk Holdings, Inc., an insurtech that operates as a managing general agent in the admitted residential property markets, with a strong presence in Texas. Wellington has developed a virtual marketplace offering that includes an easy-to-use agent portal for placing residential property insurance business.
The insurance firm, a subsidiary of Truist Financial Corp. closed on three transactions last quarter: W. Brown & Associates Property & Casualty, an Irvine, California-based surplus lines broker and MGA; Specialty Risk Associates, a Shreveport, Louisiana-based surplus lines broker and MGA; and Program Insurance Management of Sarasota, a Sarasota, Florida-based managing general underwriter with specialized programs for industrial chemical manufacturers and distributors.
In addition to Wellington, Truist said it expected to close a transaction with Fidelis Group Holdings, a Covington, Louisiana-based provider of specialty insurance products for the marine and cargo industries, by year end 2020. Truist Insurance Holdings, formerly BB&T Insurance Holdings, operates more than 250 offices through its subsidiaries: McGriff (comprising McGriff Insurance Services and McGriff, Seibels & Williams); CRC Insurance Services; Crump Life Insurance Services; AmRisc; and its Premium Finance companies (AFCO Credit Corp., Prime Rate Premium Finance Corp., and CAFO).
Lighthouse Property Insurance Corp. said in March it would acquire its sister carrier, Prepared Insurance Co. from Prepared Holdings Group. Lighthouse is a Louisiana-domiciled property/casualty insurance carrier writing in Louisiana, Texas, North Carolina and South Carolina. Prepared was a Florida-domiciled carrier authorized to write in Florida and Louisiana. Lighthouse assumed the Prepared portfolio and is writing directly in Florida through Prepared Managers, a licensed Florida managing general agent. Lighthouse also assumed all assets and liabilities of Prepared.
The resultant carrier, including wholly owned subsidiary Lighthouse Excalibur Insurance Co. (Lighthouse Excalibur), which Lighthouse acquired in May of 2019, has a statutory surplus in excess of $45 million and will cover approximately 175,000 homes across the Southeast. Lighthouse Excalibur has $11.5 million of statutory surplus as of 2019 year- end. Gross written premium for the combined enterprise will be in excess of $275 million.
Lighthouse began writing homeowners policies in Louisiana in 2008. It has since expanded over the past 12 years. Prepared Insurance, based in Tampa, was licensed to write business in Florida in 2009 and offered homeowners insurance products including flood, condo, renters and dwelling fire policies. It had 32,018 policies in force and $63.5 million in total premium as of the third quarter 2019.
U.S. insurer Allstate Corp. announced plans to buy National General Holdings Corp. for about $4 billion in cash in July, scaling up its auto insurance business at a time when the coronavirus has crushed traffic on roads and reduced claims. The deal 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.
Specialty insurance brokerages Ryan Specialty Group and All Risks in September closed on the merger of 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.
In February, healthcare liability insurer ProAssurance Corp. agreed to acquire medical professional liability insurer NORCAL Mutual Insurance Co. following NORCAL’s demutualization in a $450 million transaction. The combination was expected to create the nation’s third largest specialty writer of liability insurance for healthcare professionals and facilities.
Pennsylvania-based NORCAL writes in 39 states. It reported $342 million in direct written premium in 2018 and $50 million net income. The company’s underwriting performance and overall profitability have “deteriorated sharply recently driven by significant adverse reserve development,” according to Fitch Ratings, which placed its “A” ratings for ProAssurance on negative watch following the deal announcement.
Headquartered in Birmingham, Alabama, ProAssurance serves more than 54,000 healthcare providers in 49 states. The company had annualized medical professional liability gross written premium of approximately $475 million.
Florida-headquartered insurance broker Brown & Brown has acquired CoverHound, a digital property/casualty insurance marketplace, and CyberPolicy, CoverHound’s small business subsidiary.
California-based CoverHound launched in early 2010 and raised more than $112 million in venture capital over the last decade, including a $58 million funding round in 2019 with lead investor Hiscox and other investors including Chubb, Aflac Ventures, and MS&AD in Japan. In 2015, Chubb (then ACE) took a 24% stake in CoverHound. However, with this deal, Brown & Brown will assume 100% ownership.
Fairfax Financial Holdings and its subsidiary Allied World Assurance Co. in November agreed to sell their majority interests in Florida-based high-net worth insurer Vault E&S Insurance Co. to private equity investor Cornell Capital and asset manager Hudson Structured Capital Management. Fairfax, through Allied World, will continue to own a 10% stake in Vault following the all-cash sale.
Founded in 2017, Vault is a combination of a policyholder-owned reciprocal insurance exchange and a surplus lines company serving the high-net worth market. Since initially writing business in Florida, Vault has expanded into several states including South Carolina, New Jersey, Connecticut and Pennsylvania.
In May, Fisher Brown Bottrell Insurance, Inc., an independent insurance agency and subsidiary of Trustmark National Bank, acquired Boyles Moak Insurance Services and Creative Benefit Solutions. Founded in 1893 and headquartered in Ridgeland, Mississippi, Boyles Moak provides auto, home, health, business, liability and life insurance. Additional offices are in Biloxi and Meadville, Miss. Located in Birmingham, Alabama, Creative Benefit Solutions’ offerings include employee insurance and benefits.
Marsh & McLennan Agency, a subsidiary of Marsh, acquired Ironwood Insurance Services, an independent broker based in Atlanta. Ironwood provides commercial property/casualty insurance, employee benefits, and private client services to midsize businesses and individuals throughout the U.S. Ironwood specializes in pre-close due diligence, transactional solutions, and risk management services to private equity funds and their portfolio companies. It also serves the real estate, construction, energy, manufacturing, professional services, and health care industries. Ironwood’s 85 colleagues continue to operate out of Atlanta and Charlotte, N.C., offices.
AssuredPartners acquired Cypress Insurance Group of Fort Lauderdale, Fla. in May. The team of 20 remains under the operational leadership of Terry Bond and Debbie Arciola. The Cypress reported $3 million in annualized revenues.
Johnson & Johnson expanded its presence in Georgia by acquiring the assets of National Program Management (NPM) in Alpharetta. The transaction closed Sept. 1. NPM was formed as a wholesale broker specializing in environmental property/casualty insurance.
In 2014, NPM acquired the assets of the Leverett Insurance Group., a wholesale brokerage firm. That acquisition expanded NPM’s brokerage capabilities to include energy, transportation, real estate, manufacturing, retail, construction, non-profits, and professional service firms. Johnson & Johnson is a fourth generation, family owned managing general agency based in Charleston, South Carolina.
Blue Ridge Specialty Group of Greenfield, South Carolina, a managing general underwriter specializing in trucking -related risks, was acquired in June by Nebraska-headquartered Applied Underwriters. Blue Ridge, which works with agents and brokers, retained its operations in South Carolina. Applied Underwriters CEO Steve Menzies said the addition of Blue Ridge sets complementary services into combination as Applied continues its expansion into the property/casualty insurance space.
Peel & Holland Insurance merged with Riddle Insurance of Madisonville, Ky., and its subsidiary, R. Barga and Company Insurance of Benton, Ky. The companies provide business insurance, surety and bonding, family insurance, and employee benefits, along with workplace wellness programs.
This merger, which was finalized Jan. 1, 2020, combines teams totaling 83 employees in seven regional office locations across western Kentucky. From an operational standpoint, Riddle Insurance, R. Barga and Peel & Holland each continue to function as independent insurance agencies with access to multiple carriers
In July, Lamb Insurance Services acquired Prestige Insurance Services of Charlotte, N.C effective July 1. Lamb is headquartered in New York, N.Y. with offices in or near major cities around the country. Lamb’s focus is serving the nonprofit and social service organizations. is licensed throughout the Carolinas, Virginia and Georgia, with satellite offices in Chester and Columbia, South Carolina.
The Prestige team has more than 17 years’ experience with nonprofit and social service organizations, including several of the country’s top historically Black colleges and universities.
New York’s Constellation Affiliated Partners has acquired the Florida-based managing general underwriter Coastal Insurance Underwriters and its technology subsidiary, Cybercom. Ponte Vedra Beach, Fla.-based Coastal Insurance Underwriters insures 8,000 homeowners and condominium associations in Florida, California, Alabama, Texas, Georgia, Kentucky, and Tennessee.
Cybercom provides technology development services to Coastal and third-party clients throughout the country. Coastal acquired the assets of Cybercom on Jan. 2, 2020. Constellation said it will expand its product offerings to the condominium and homeowners association marketplace and it will utilize the web-based platform designed by Cybercom.
Four retail insurance brokers – Founders Insurance, Hutchinson Traylor Insurance, McGinty-Gordon & Associates, and Waites & Foshee – signed definitive agreements in December to combine to form Oakbridge Insurance Agency LLC, an insurance brokerage firm serving clients across Georgia and the Southeast U.S. As part of the transaction, which closed Dec. 31, 2020, Corsair Capital LLC, a private equity firm focused on business and financial services, has made a strategic investment in Oakbridge. Robert C. Smith will lead as CEO.
According to a statement, the combination of these agencies creates one of the largest privately-owned insurance, risk management, and employee benefits firms in the Southeast. Oakbridge plans to grow organically through investments in new talent, infrastructure and through strategic acquisitions. Oakbridge plans to grow the firm’s specialty practices strategically and geographically, as well by attracting other firms.
Oakbridge’s approximately 175 employees will work across 15 existing office locations throughout the state of Georgia. Each firm will maintain its current trade names and branding and operate under the umbrella brand of Oakbridge Insurance Agency LLC.
Hutchinson Traylor, based in LaGrange, Ga., is a regional provider of risk management, insurance services, and employee benefits services to clients throughout the Southeast, operating from seven offices throughout the state of Georgia. Established in 1969, Waites & Foshee Insurance Group serves the state of Georgia with eight offices throughout the state. McGinty-Gordon & Associates specializes in property and casualty coverages for families and businesses with a specialty in hard-to-place properties that have coastal exposures. Founders Insurance is headquartered in Woodstock, Ga., and serves clients throughout Georgia and the Southeast.
Marsh, Berry & Company, Inc. acted as financial advisor to the four agencies in the transaction and Maynard, Cooper & Gale, P.C. acted as legal advisor.
Was this article valuable?
Here are more articles you may enjoy.