AJ Gallagher completes WTW acquisition

AJ Gallagher has completed its acquisition of Willis Towers Watson’s treaty reinsurance business. Combined with Gallagher’s existing reinsurance operations, the business, trading as Gallagher Re, brings together more than 70 offices across 31 countries and 2,400 staff.

“This acquisition brings specialist expertise, underpinned by a portfolio of analytics capabilities including catastrophe modelling, dynamic financial analysis, rating agency analysis and capital modelling that will immediately provide exceptional value to insurance carriers and insurance capital providers around the world,” Gallagher said in its announcement.

The business will be led by James Kent, global reinsurance CEO, who will report to Tom Gallagher, Gallagher’s CEO of global property and casualty brokerage.

The completion follows last month’s conclusion of the Competition and Markets Authority investigation into the acquisition, which cleared the deal.

First announced in August, the deal covers substantially all of WTW’s treaty reinsurance business in return for $3.25 billion, plus an earnout payable in 2025 of up to $750 million in cash. That followed the breakdown of earlier talks following the collapse of the proposed tie-up between Aon and WTW. As  confirmed at the time, the deal did not cover Willis’ captives-related operations. However, the agreement does cover Willis Re’s securities unit, which structures and manages cat bonds and other ILS deals.

“I’d like to officially welcome our new reinsurance brokerage colleagues to the Gallagher family of professionals,” said J Patrick Gallagher Jr, chairman, president and CEO. “Together, we will build upon our shared focus of outstanding service, expertise and client-centric culture. I am confident the combination will deliver tremendous value to our clients, our global brokerage and risk management teams, and our shareholders.”

Kent added: “This combination marks a new chapter for two remarkable reinsurance broking teams as well as for our valued and extremely supportive clients and stakeholders. We are bringing together highly complementary and well-respected reinsurance businesses to create a truly compelling unified reinsurance platform. I am incredibly proud to be leading Gallagher Re into its next phase of growth.”