Arthur J. Gallagher’s (Gallagher) agreement to acquire the majority of reinsurance broker Willis Re will take the company’s data and analytics capabilities to new heights, according to J. Patrick Gallagher, Jr., Chairman, President and Chief Executive Officer (CEO).
Alongside other Willis Towers Watson (WTW) assets, Gallagher is poised to purchase most of Willis Re as part of a remedy package proposed by Aon as the broking giant looks to complete its combination with WTW.
The $3.57 billion transaction stands to greatly enhance the size and reach of Gallagher’s reinsurance operation, Gallagher Re. Once integrated, Gallagher Re will become the third largest reinsurance broker in the world with a presence in more than 25 countries.
Furthermore, Gallagher is gaining a broad set of expertise through the addition of more than 2,300 new colleagues from Willis Re, including the insurance-linked securities (ILS) and capital markets focused, Willis Re Securities team.
“The jewel of the transaction is reinsurance and we’re very, very excited to be bigger at that,” said J. Patrick Gallagher, Jr., speaking during a recent investor call. “It puts us in a position now to clearly be in the top three in virtually every part of the business that we touch.”
Gallagher expects the addition of the vast majority of Willis Re’s treaty and facultative broking operations to drive “tremendous value for clients, carrier partners and shareholders,” as the company expands and adds new solutions and services in new niches and regions.
“We also get top notch, I mean really world class data and analytic capabilities,” he continued. “From catastrophe and capital modelling to dynamic financial analysis tools, that we can further leverage with our current Gallagher Re relationships and potential prospects.
“And with our increased scale and commitment to providing our teams with the tools, resources and products to win, I see us investing in and broadening out the services we provide over time.”
Speaking candidly about the company’s own data and analytics capacity, Gallagher said that this is an area where it was previously behind.
However, the capabilities it stands to gain through the WTW transaction “will take us to another level that’s very exciting,” he said. “And, truthfully, data and analytics across all of our businesses now, is probably becoming one of our absolute top three key focuses, because that’s where the world is going.”
Overall, Gallagher is very excited about the transaction and its CEO described it as the latest “seminal moment” for the company.
“And like we have throughout our history, we seized upon the opportunities to drive our long-term strategy forward with what we think are really attractive valuations for great operations,” said Gallagher.