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Hi Friends! Welcome to our final edition of 2024. We will take a break for the holidays from next week until January 2025, but we look forward to returning in the New Year. For now, let’s focus on what happened this week. There was a significant acquisition announcement, like last year, which seems normal as we wrap up the year. There was a move to re-enter California, a state that has seen many carriers pull out due to climate risk and market conditions, but this could also point to a return for others. Finally, other headlines followed the themes we have seen most of the year, such as new ventures and fundraising. So, let’s dive in and explore the three things we learned this week. |
Gallagher’s $13.45B Power Play: The Big Deal to End 2024Gallagher made 2024’s big end-of-year move—a $13.45 billion acquisition of AssuredPartners, one of the fastest-growing insurance brokers in the U.S. The deal looks like Aon’s acquisition of NFP, which arrived around this time last year. This monumental deal isn’t just about dollars; it’s a strategic leap into dominating the middle-market property, casualty, and employee benefits sectors. By snapping up a powerhouse like AssuredPartners, Gallagher cements its status as a key player in niche markets such as transportation, energy, healthcare, and government contracting. AssuredPartners skyrocketed to success through a bold acquisition strategy, adding over 500 businesses and boasting nearly 400 offices worldwide. With $2.9 billion in adjusted revenue last year, this isn’t just another deal—it’s a seismic shift in the insurance brokerage space. What’s especially striking is how Gallagher is funding this acquisition. A blend of long-term debt, short-term borrowings, free cash, and equity ensures the company maintains its investment-grade debt rating while positioning itself for growth. The deal is set to close in early 2025, pending regulatory approvals. This isn’t just the largest sale in U.S. history; it’s the latest example of the industry’s ongoing consolidation trend. Gallagher’s strategic expansion into the U.K. and Ireland further underscores its global ambitions. This move is more than a business decision; it’s a statement of intent—Gallagher is here to lead the future of insurance brokerage. Deals like this highlight the growing need for scale and specialization in an industry shaped by rapid change and consolidation. For Gallagher, it’s not just about acquiring a competitor; it’s about setting the tone for the next era of insurance brokerage. |
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Farmers Insurance Returns to California Amid Market ImprovementsFarmers Insurance is set to re-enter California, reintroducing several personal insurance products to new customers. Starting December 14, 2024, the company will offer condominium and renters insurance, followed by personal umbrella insurance on December 24, 2024. Landlord and vacant property insurance options are slated for March 2025. Additionally, Farmers plans to increase the number of new homeowners policies available to Californians, raising the monthly cap from 7,000 to 9,500. This expansion reflects the company’s confidence in the state’s improving insurance marketplace and aligns with the forthcoming implementation of Commissioner Ricardo Lara’s Sustainable Insurance Strategy. Behram Dinshaw, president of personal lines for Farmers Insurance, stated, “Farmers Insurance has decided to take these steps to increase coverage availability for California consumers because we recognize that the state’s insurance marketplace has indeed improved.” This strategic expansion underscores Farmers Insurance’s commitment to meeting the evolving needs of California residents and businesses, providing them with a broader array of coverage options as the state’s insurance environment stabilizes. |
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Industry Trends Con’t: Funding Rounds, Reinsurance, Global Acquisitions, and Investor ActivismHere is a roundup of headlines that reflect the trends we’ve seen all year in the insurance and reinsurance industry: transformative acquisitions, bold expansions, innovative product launches, and activist investors driving strategic shifts. These stories capture the pulse of a dynamic marketplace, closing out the year with momentum and change. Players Health has successfully closed a $60 million Series C funding round. This investment elevates the company’s total funding to over $100 million. The capital will be utilized to advance AI-powered product personalization, pursue strategic mergers and acquisitions, and expand the workforce to meet growing demand. Players Health aims to enhance athlete safety across various levels of sports, serving organizations such as USA Softball and the American Youth Soccer Organization. Allianz has launched Sconset Re Ltd., an independent strategic reinsurance platform based in Bermuda. Sconset Re will reinsure a $4 billion block of annuity liabilities and has entered into a forward flow agreement to reinsure between $5 billion and $10 billion of new business. The platform is capitalized through equity investments from institutional partners, including Voya and Antares, with PIMCO managing the majority of the investment portfolio. Specialty insurance carrier Relm Insurance has launched its own MGA in the United States, now licensed in all 50 states with locations in Miami, New York, and Pennsylvania. This expansion enables Relm to better serve emerging and innovative industries, including digital assets, cannabis, and psychedelics, by providing tailored insurance solutions across the country. Activist investment firm JANA Partners has acquired a stake in Markel Group Inc. and advocates for the specialty insurer to consider separating or selling its private investments division. Managing Partner Scott Ostfeld highlighted that Markel is “significantly undervalued” and would benefit from enhanced execution in its core insurance operations. JANA also views the entire company as a potential acquisition target for larger insurers. |
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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! |