3 Things – Marsh Acquires McGriff, Rebranding & New Ventures, Climate Innovations & Mutual Affiliation

Hi Friends! We’ve reached just over a week until we arrive at Insuretech Connect Vegas 2024. The Wikifri Team will be in attendance and look forward to connecting with the community. This week’s news cycle had big headlines, and we have summarized them into the usual ongoing themes. This week, we are following M&A activity along with launches, rebranding, and mutual companies combining to increase their financial viability. Once again, let’s dive in and explore the three things we learned this week.

Marsh Acquires McGriff and Other M&A Activity

As M&A activity gains momentum, it’s clear that the industry is consolidating, even in the face of high valuations, especially in the distribution segment. The promise of lower interest rates is a driving force, and we continue to see major players making strategic moves to position themselves for the future.

The biggest story this week was that Marsh announced they would acquire McGriff Insurance Services, a division of TIH (formerly Truist Insurance Holdings), for $7.75 billion. This strategic move is expected to bolster Marsh’s position in the U.S. market, particularly in commercial and specialty insurance. The acquisition will strengthen its portfolio and expand its reach, benefiting from McGriff’s established client base and expertise. For TIH, the deal allows them to divest a major piece of their business and take advantage of a significant valuation to bring capital back to their private equity investors while allowing them to focus on the future.

In other news, WTW, has agreed to sell its direct-to-consumer distribution unit to a public equity firm for $632.4 million. The transaction is part of WTW’s strategy to streamline its operations and focus more on core advisory and brokerage services. This strategic move is a response to the competitive landscape in the insurance industry and signals WTW’s commitment to honing its business model to remain competitive in the future.

Everest Re Group sells an MGU serving customers in the Sports, Leisure, and Entertainment market to Ryan Specialty, a leading service provider of specialty products for insurance brokers. This transaction aligns with Everest’s strategic focus on core business operations, while Ryan Specialty continues to grow by acquisition, positioning itself as one of the most active players in the industry this year.

Rebranding and New Ventures

The insurance industry continues to change as companies rebrand, form new partnerships, and launch innovative solutions to address evolving risks. Recent developments include the creation of a reinsurer, and the introduction of new liability protection for youth sports leaders.

Millennial Specialty Insurance has announced its rebranding to “MSI.” This shift reflects the company’s evolution and growth since its founding. The rebranding is expected to enhance its market position and signal a new phase of expansion and modernized services in response to the changing needs of its clients and the broader industry.

Starwind Specialty Insurance Services, a subsidiary of TIH, has partnered with private equity firm Stone Point Credit to launch Fractal Re, a collateralized reinsurer. Fractal Re raised $270 million in capital, backed by investors like Nationwide and Enstar. This new entity, with its substantial capital and strong backing, is poised to provide reinsurance capacity to support Starwind’s growing portfolio of casualty insurance programs, signaling a promising future for the industry.

NAYS (National Alliance for Youth Sports) has partnered with Matterhorn Insurance to launch a new liability protection program called Matterhorn Protects. The program focuses on providing excess liability coverage to youth sports organizations and leaders, including directors, coaches, and volunteers. This initiative aims to safeguard individuals from the growing risks of managing and leading youth sports, particularly in today’s increasingly litigious environment.

Climate Innovations and Mutuals Band Together

The unpredictability of recent weather patterns continues to fuel innovation, as players move in with new cat models and parametric products. Meanwhile, struggling mutual companies continue to look for a path forward by combining their balance sheets with stronger entities. The landscape is still full of entities that have been hit hard by this trend.

Fathom has launched a Global Flood Catastrophe Model to enhance worldwide flood risk prediction and mitigation strategies. This model uses advanced data and technology to provide more accurate insights into flood exposure, helping businesses navigate the growing risks in a changing climate.

In a related effort, Trigger Parametric, a UK-based parametric risk transfer underwriter, has launched with support from insurtech veteran Graeme Dean. The company will serve as an MGA and focus on parametric risk solutions for natural and man-made perils.

Wisconsin-based Rural Mutual Insurance and Badger Mutual Insurance announce an affiliation. Rural Mutual, part of the farm bureau network and rated A+ by AM Best, will provide a strong balance sheet, while Badger Mutual expands the overall footprint across six additional states. AM Best views the affiliation positively for Badger, but Rural’s rating is under review due to concerns about Badger’s recent financial volatility

Join us as we continue to explore the headlines and news shaping the insurance sector, and stay tuned for more insights on the unfolding narrative of our industry!  Stay productive, stay safe and stay in touch!