Howden grows top-line 60% in ’22 as M&A and organic snowball: CEO
Global re/insurance broker Howden Group Holdings managed 60% top line growth in 2022 to £1.84 billion, and told Intelligent Insurer it had intertwined a high-growth combo of both tuck-in and strategic M&A with what it calls record organic growth of 19% across key segments.
EBITDA, a useful profit measure for high-growth stories which is agnostic about the financing mix, rose 69% year on year to £565 million from £335 million in the year-prior period. The EBITDA margin, taken against revenue, came to a palpable 31%.
“What is pleasing about the result is that it is very evenly spread, both by geography and by segment,” CFO Mark Craig told Intelligent Insurer.
The CFO cited 18% organic growth in the core broking business and 26% in underwriting to hit the blended 19% organic growth rate.
“We grew very evenly across all regions in both divisions; it’s strong growth in our regions around the world,” Craig said.
Speaking in a morning call to Intelligent Insurer after posting a sparse FY2022 trading statement, CEO David Howden (pictured) additionally cited a 52% increase in organic for the Howden reinsurance wing, 23% for specialty, and “very high” growth in emerging markets including 21% for Asia and Middle East. UK acquisitions A-Plan and Aston Lark grew 11% and 14% respectively, he claimed. Dual doubled its group GWP to £2.2 billion on both M&A and organic growth of 26%.
Growth remained a targeted endeavour chiefly at European markets and focused on existing specialities, he signalled.
The Howden CEO highlighted MGA and MGA broking, facultative and capital markets as segments where its existing strength is meeting market opportunity stemming from capacity shortages.
To wit: 2023 is a "really good time for an effective reinsurance broke," Howden said of the TigerRisk buy. And of facultative: "Fac is back, massively; and we are leading fac in America."
Officials swore off numeric growth targets for 2023, except to remind that two major acquisitions are already in the bag for 2023, including the major move into reinsurance: TigerRisk closed early January.
Revenue pro forma for the completed acquisition of TigerRisk and the signed acquisition of March R.S. would run upwards of £2.036 billion and EBITDA would hit £648 billion, the company claimed.
“Our strategy is to build geographic reach and then to deploy our specialties, retail or reinsurance, and our key focus is on the UK and then continental Europe,” Howden told Intelligent Insurer. “And in the US, underwriting and reinsurance.”
The difference between the 60% absolute growth rate and 19% organic comes down to “some £400 million” in new revenue from the most recent acquisitions. But M&A is a door to organic, the Howden CEO said. For the firms taken over the prior 24 months, Howden took 130 million in revenue in 2022 and can increase that number to 200 million for 2023, he said.
For the year, Howden cited acquisitions completed in Switzerland, Belgium, Norway, Italy, France, Spain, Estonia, Hong Kong, Bermuda, Australia and the UK.
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