17 September 2014 Insurance

CGSC seeks US hires; acquires in LatAm

A very competitive environment around acquisitions in the US market means that Cooper, Gay, Swett & Crawford (CGSC) is seeking strategic hires in that market instead. It also has five acquisitions in Latin America going through due diligence.

Toby Esser, CEO of the CGSC Group, said its recent hire of Thomas Ruggieri, the founder of Advisen, as chief executive officer of its North American operations, falls into this category. He said Ruggieri will bring a different perspective to the firm given his background in technology and analytics. The executive, who also previously worked at Marsh, also founded the broker’s small business managing general agent (MGA) SAFE facility.

“Unless it is a private deal, the M&A environment in the US is very competitive at the moment,” Esser said. “There is a lot of money around and prices, especially where sold through auction, are very high.

“On top of that, it is hard to win hearts and minds and build a good relationship with a firm where that type of deal occurs. On that basis, it is our preference to find good people and move into new areas from scratch.”

In Latin America, however, it is a different story. Esser said the broker hopes to complete four deals in Brazil and one in Mexico soon. It is also pondering creating a single platform from which to run all its operations in the market.

In the UK, he said, it is focused on integrating previous acquisitions, which have made it a substantial presence in the market. In the Middle East, it is hiring producers of business in its Dubai office. In Asia, he anticipates it will open several new offices across the region soon.

Commenting on trends in the reinsurance market at present, Esser said that when it comes to buying reinsurance a split has developed between the attitude of the world’s biggest insurers and that of smaller groups.

He said that bigger players have become more numbers and data-driven and seek long-term solutions with few variables. Because of the high level of scrutiny applied by these companies’ stakeholders, it is far more difficult for them to justify varying the amount of reinsurance they buy based on wider market trends.

“There is such a level of oversight around the bigger companies now. They will be asked: ‘If you didn’t need this coverage last year, why do you need it this year?’

“In comparison, smaller players have a greater level of independence around what they can do. We are seeing some of the mid-sized players do that to reduce their net a little.”

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