Gallagher says Willis Re an ‘amazing story’, nailing it in just 5 months
Global brokerage Gallagher is taking early victory laps for the integration of recently acquired reinsurance broking operations Willis Re, talking up a “terrific story” in sales synergies and fast-track integration well ahead of schedule.
“It has really been an amazing story,” CEO Patrick Gallagher (pictured) told the Q1 earnings call of the integration of Willis Re, only five months after closing purchase. “We are absolutely nailing it when it comes to what we hoped performance would be and I think it is going to continue to be a great business for us.”
The acquired operations brought $337 million in total revenues during the first quarter and $172 million of management's preferred earnings measure of adjusted EBITDAC.
That calculates to overall organic growth of “nicely 8% plus or minus a point” when adjusted for staffing departures that occurred prior to Gallagher’s assumption of the business, CFO Doug Howell claimed.
“It’s really a terrific story to post organic [growth] nicely in the upper single digits after what they’ve been through,” CFO Howell said of a unit held in regulatory purgatory for most of 2021 prior to the Gallagher acquisition. “I got to give it to the team, for them to be out there battling the way they have, holding their clients, writing new business.”
Gallagher closed the deal for Willis Tower Watson’s treaty reinsurance brokerage business at the start of December 2021, after Gallagher’s second attempt to buy the asset. The sale had been held up by the on-again/off-again merger of Willis Tower Watson and Aon.
Current 2022 guidance for $732 million revenues and $256 EBITDAC is all within small fractions of estimates last discussed at the mid-March investor day. Those projections include a seasonal slowdown throughout the year from the Q1 peak.
“Very little change to our first year of ownership expectations other than a small impact from Russia, Ukraine and FX,” CFO Howell said.
CEO Gallagher likes the people fit and synergies amongst his staff and divisions. Departures are “minimal to zero,” he claimed. Management claims to have met with clients vociferously grateful “that there is not one less competitor on the marketplace” and pleased that Willis Re teams remain in one place, CEO Gallagher said.
Integration is reportedly proceeding faster than planned. Forecast costs of the integration remain at the originally targeted $250 million mark, but could be booked sooner as the company outperforms versus its initial schedule. Most elements of the transition could be finished by end-2022, 6M or more ahead of schedule. Tech integration could stretch to early 2024.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
Already registered?
Login to your account
If you don't have a login or your access has expired, you will need to purchase a subscription to gain access to this article, including all our online content.
For more information on individual annual subscriptions for full paid access and corporate subscription options please contact us.
To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.
For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk
Editor's picks
Editor's picks
More articles
Copyright © intelligentinsurer.com 2024 | Headless Content Management with Blaze