Interesting mergers & acquisitions (M&A) news this morning as insurance and reinsurance broker Ed Broking Group announced that it is being acquired by financial broking and technology house BGC Partners.
It’s interesting as BGC Partners is more of a financial products broker, offering voice, electronic trading and execution services, but with relatively limited dedicated insurance and reinsurance expertise.
BGC Partners had acquired Lloyd’s brokerage Besso Insurance Group in 2017, as it began to build out some re/insurance market capabilities.
The addition of the Ed Broking team and platform will significantly deepen the firms abilities in the specialty lines and reinsurance broking space in particular, as well as the volume of Lloyd’s broking business that will now go through the BGC business.
A subsidiary of BGC will acquire 100% of Ed, including its broking operations under the Ed brand in the UK, Singapore, Hong Kong, Dubai, Miami and China, its German marine broking arm, Junge, and its MGA operations, Globe Underwriting based in the UK, Epsilon in Australia and Cooper Gay France based in Paris.
Shaun D. Lynn, President of BGC Partners, commented on the news, “We are delighted to reach an agreement to purchase Ed, a leading independent Lloyd’s of London broker with a global footprint. It will be an important acquisition with respect to our strategy of building the insurance brokerage division within the Company”.
Steve Hearn, Group CEO of Ed, added, “To be able to announce the agreement with BGC is tremendously satisfying, given their ambition and appetite for growth. We feel that the best fit and the strongest future for us is with BGC, one of the leading brokerage firms in the world. With them, we are poised to make the next leap forward to redefine insurance broking.”
Lynn also said, “Since the formation of BGC in 2004, BGC has demonstrated a proven track record of successfully building new brokerage verticals.”
Combining Ed ‘s insurance and reinsurance brokers as well as back office personnel with the Besso business BGC had already acquired, means the firms re/insurance operations are expected to place roughly $2 billion of premium in 2018 and have around 300 combined brokers operating across 10 countries.
Ed’s broking team also includes retrocession market expertise and placements to the capital markets via collateralized reinsurance with ILS funds.
It will be interesting to see how the enlarged BGC Partners insurance and reinsurance broking operations can integrate with the firms broader technological expertise and electronic trading platforms in future, as the firm has a modern approach to transacting business which could see them trying to push the envelope when it comes to risk trading.