20 September 2013 News

JLT acquires Towers Watson’s reinsurance business

Jardine Lloyd Thompson Group (JLT) will acquire the reinsurance brokerage business of Towers Watson for a cash consideration of $250 million (£156 million).

Towers Watson’s reinsurance brokerage business will be merged with JLT’s reinsurance business, JLT Re, to create a business with combined revenues of $266 million (£166 million) and 700 people in 35 locations in 17 countries. The combined business will be branded for a transitional period as JLT Towers Re.

Towers Watson’s reinsurance brokerage business generated revenues of $166 million (£104 million) and a pre-tax profit of $26 million (£16 million) in the year ended June 2013, making it the fourth largest reinsurance broker in the world.

The acquisition will allow JLT to build on its international reinsurance brokerage operations, while giving it access to Towers Watson’s risk consulting and software services and proprietary actuarial models.

Upon formal completion of the transaction, Ross Howard, who is currently head of Towers Watson’s reinsurance brokerage business, will become executive chairman of the merged operation. Alastair Speare-Cole, CEO of JLT Re, will become CEO of the enlarged business. Alan Griffin will step down as chairman of JLT Re, but will retain a board and advisory role.

The acquisition is subject to regulatory approvals and is expected to complete before the year end. The two businesses will be fully integrated over the course of 2014 and 2015.

Total transaction and integration costs are expected to be approximately $7 million (£4 million) and $20 million (£12 million) respectively. The gross assets being acquired amount to approximately $106 million (£66 million).

“I am delighted to be able to welcome the Towers Watson team and their clients to JLT,” said Dominic Burke, group chief executive of JLT. “Towers Watson offers us a very strong reinsurance platform in the key North American market, as well as bringing further strength in the London Market and a leading analytical capability.

“We see a significant strategic opportunity through the merger of the two businesses to create a formidable new force and restore client choice to the reinsurance market.  We are committed to investing in the business to enhance our client proposition and drive growth, as we have successfully done across the rest of the JLT Group in recent years.”

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