A new report from international law firm Clyde & Co may have found that global insurance M&As are slowing down in general, but across Australia they remain a key part of broking businesses.
Whether it is acquisitions from broker networks, or individual brokers looking to combine or diversify their businesses, the M&A market in the country remains active and an important growth opportunity. However, if you’re considering a merger or acquisition to expand your business then Dean Carrigan, partner at Clyde & Co, believes several factors must be taken into consideration.
“Speed of execution and integration is absolutely key and having a clear blue print, clear strategy and clear destination mapped out and articulated so that everyone on the team can work towards that is fundamental,” Carrigan told Insurance Business.
Search and compare insurance product listings for Organisations from specialty market providers here
For those firms on the other side of M&A activity, Carrigan noted the importance that familiarity with the acquiring organisation plays in any deal.
“From a target’s perspective, it would be key for them to be comfortable that the acquirer going forward is not simply going to swallow them up and spit them out and integrate them ruthlessly into the bigger machine,” he said.
While the major broker networks have looked to M&As to diversify their offerings into expanded areas of risk, Carrigan stressed that for smaller firms the idea of upsizing via acquisitions outside of the core business may not be the best solution.
“Like all businesses nowadays there has been, and maybe the pendulum is swinging the other way, an aspiration to try and be all things to all people. The reality is that, especially in the broking market, there is and will continue to be a genuine need for real expertise, deep understanding and knowledge of particular classes of business, of particular industry segments,” Carrigan continued.
“I think that is where the smaller independents can really carve out a niche for themselves, if they have that real focus, deep knowledge and understanding in a particular sector.”
Related stories:
Insurance M&A activity tumbles
How does Chubb select M&As?
