Whether involving initial cash considerations of £520 million, expanding an MGA offering or growing a regional footprint, M&A activity has been dominating insurance trade press headlines in recent weeks.
As a “naturally acquisitive” firm, Gallagher has not been resting on its laurels during this busy period snapping up a two-in-one deal in its acquisition of Lifesure Group Ltd and Barnes Commercial. Under the terms of the deal, both Lifesure and Barnes Commercial will become part of Gallagher’s UK & Ireland retail division, with Barnes set to be rebranded to Gallagher early in the new year.
Discussing the acquisition of Lifesure which he described as “a real prize”, Gareth Birch (pictured) noted that the business is an ideal fit for Gallagher’s UK SME and personal lines division which he heads up as MD. With some 1,350 colleagues operating in teams spread across 16 core locations, he said, the unit is ever-expanding and the addition of Lifesure will see the growth of its existing presence in the leisure sector, while expanding its offering to the specialist market.
“Lifesure is a business I’ve known for some 15-20 years, when they were competitors of mine when I was running leisure businesses originally for JLT and then the leisure business that I built when I joined Gallagher in 2014,” he said. “And they’re a hugely complementary operation to what we already have. Alongside the scheme that we run for the caravan and motorhome club, I think Lifesure’s 14,000 motorhomes make us the largest motor home broker within the UK.
“They’ve had a longstanding presence in the residential park home space, which is an area that we’ve got a little bit of traction in but this will really kickstart that activity… And they’ve got a large and well-established static holiday home book as well which is really complementary to our leisure operation based in Gloucester.”
Founded in 1971, Lifesure has served the market for decades and built a longstanding reputation for service excellence. This was not just a reason why Gallagher was interested in the deal – but also a key consideration when it came to communicating what it will mean for customers. On the day the deal was announced, Birch was in-house at the Cambridgeshire office answering questions from customers, some of whom have been with Lifesure for 20-plus years.
“As I said to them, they’ll still be dealing with the same guys on the end of the phone,” he said. “They’ll still be seeing the Lifesure brand and they’ll still be looked after by a business that is really committed to the leisure sector. The backing of Gallagher should reinforce the customer-led approach that’s already been there before.”
Birch noted that when you’re as familiar with the acquisition process as Gallagher is, you know what to look for during the due diligence process. You learn very early on that the questions being asked by the team reveal their key areas of focus, he said, and the key questions from the Lifesure team centred on understanding the culture at Gallagher, and what the deal would look like for customers and staff alike.
“The questions from Paul [Reid, Lifesure MD] and his senior team were about what this would mean for the whole Lifesure team,” he said. “And not just about coming into a home where their roles were secure but also about what opportunities they would have to develop within Gallagher. And it felt very comfortable, very natural from an early stage. I think we’ve got a great deal here - for Lifesure’s customers and colleagues as well as Gallagher.”
In addition to the added customer base or specialism an acquisition can bring, a core benefit of dealmaking is the new talent it can add to a business. Birch highlighted that the first person he met when he walked through the doors of Lifesure’s premises was someone who had been in the business 35 years.
“I said to him, I hope you’re not going anywhere!” he said. “Because the Gallagher family through M&A always talk about ‘buying brains’ and that’s what I think we’ve got the opportunity to do here. I think that why [Lifesure] is such a long-term established and successful business is because they’ve got a lot of smart people who understand the sector and care about doing a great job. And that fits really well with us.”
Looking to the future, Birch emphasised his team’s focus on niche risks and specialist pockets of the insurance market. It’s a sector that has and will continue to go through changes, he said, whether that’s direct players coming into the market, or the new range of distribution opportunities presented by the efficacy of online trading.
“It’s important that Gallagher retain a real role and value in that space,” he said. “We’re not trying to become a tech company. We’re looking to remain a broker, albeit through changing and evolving channels. We’re finding niches that need a little bit more experience, a little bit more advice and which can really benefit from the attributes that Gallagher has as a business.
“We find ourselves playing in places that are less attractive to the volume players, less attractive to the direct insurers and more akin to the real skill set and value that Gallagher can bring… We pick the places where we want to play. We love niches, we love slightly non-standard activity and slightly less understood activity - because that gives us an opportunity to be ourselves which is of real value to our customers.”
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