AUB Group, an Australian listed financial services group comprised of insurance brokers and underwriting agencies, is to acquire near 200 year old insurance and reinsurance broking group Tysers, gaining wholesale Lloyd’s, reinsurance and some insurance-linked securities (ILS) expertise.
AUB Group had recently explained its ambitions to expand internationally beyond its Australia and New Zealand core, with the Lloyd’s market a particular target, as well as other wholesale areas of insurance and reinsurance.
AUB had recently confirmed it was in talks with Tysers, but with a resolution or way forward yet to be agreed.
Now, the company has said this morning it will acquire Tysers for a minimum UK £500 million, with a potential additional consideration of UK £100 million based on achieving revenue targets.
It is acquiring 100% of Tysers from investor Odyssey Investment Partners, but Odyssey has a stake in AUB so will retain exposure to the broker.
“Tysers strengthens AUB’s competitive position,” the company explained, allowing it to design and deliver products for its clients, establish new agencies and secure Lloyd’s binders.
But Tysers also has a Bermuda arm, which it had established in 2019 as it sought out further expansion and to produce business from both traditional reinsurance and alternative or insurance-linked securities (ILS) markets on the island.
Tysers has had a reinsurance practice for well over a decade and has interacted with alternative or ILS capital sources over the years as a result.
So, in acquiring Tysers, AUB has also inherited the reinsurance division and will now have access to ILS markets, that it could put to work in servicing its clients, or in putting capital behind its agency underwriting ventures.
AUB said that it aims to “capture further economics in the broking value chain and accelerate scale in its Agencies.”
Alternative reinsurance capital sources could play an important role for the company in achieving these aims.
Mike Emmett, AUB Group CEO commented on the announcement, “The acquisition represents an important next step in the AUB Strategy to build out our client offering and risk expertise. Lloyd’s is the largest insurance market in the world. Tysers provides AUB Group the ability to access a diverse range of risks and insurance types for our clients and broker networks in Australia and New Zealand whilst also gaining the capability to accelerate the establishment of new agencies in these markets.
“Clive Buesnel, Tysers CEO, is a highly respected insurance executive in the Lloyds and London market, and we are delighted to welcome him and the Tysers team to the AUB family as we embark
on a new chapter for both AUB Group and Tysers.”
Clive Buesnel, Tysers CEO added “AUB is the perfect partner to allow Tysers to continue our proud history and support our growth ambitions. The strategic and cultural alignment is clear, and we are excited about executing on future opportunities together. We are proud of our culture and track record and look forward to working collaboratively and innovatively with AUB.”
AUB aims to build scale in the Lloyd’s wholesale broking market, but has the potential to now build out greater expertise in reinsurance and ILS broking as well.
Plus the use of alternative sources of capital to support its underwriting agency operations could become a focus, while working more with ILS fund markets as well.