McGill & Warburg Pincus launch new specialty risk solutions broker & advisor

Steve McGill, the former head of insurance and reinsurance brokerage Aon, and global private equity investors Warburg Pincus, have launched a new global specialty risk solutions broker and advisory, that aims to offer a differentiated proposition to clients and help them access risk capital globally.

The awaited launch of McGill & Partners sees the 40 year broking veteran McGill returning to the sector after a hiatus of a couple of years. He had previously been the Group President of Aon from 2005 to 2017, prior to which he worked at JLT Group, including latterly as Group CEO.

Seeing an opportunity to launch a new and differentiated offering in the insurance and reinsurance broking space, McGill has teamed up with Warburg Pincus and secured an initial equity commitment of up to $250m from funds affiliated with the private equity investor to launch McGill & Partners.

The broking space is competitive and also challenged, given the focus on getting value from intermediaries and not paying unnecessary costs. Hence launching a new player at this time may be seen as a task fraught with difficulties, but McGill has the pedigree and backing to develop something new and that seems to be what he is trying to do.

McGill & Partners will be focused on making strategic risk placements and providing advice to corporate clients, particularly those that have complex insurance requirements.

Offering what it terms “a differentiated value proposition and comprehensive access to risk capital globally,” McGill & Partners is breaking into the hyper competitive commercial broking space, but we’re told will have an agnostic approach to capital and structural form of placements.

We’re also told that efforts will be made to leverage technology wherever possible, in order to provide efficient placement of risk, something other brokers are sometimes guilty of shying away from unless the platform is under their ownership.

McGill & Partners will be headquartered in London and also have a centre of excellence (as it’s termed) in New York, with additional operating hubs to be added in other key markets over time.

As well as capital from funds affiliated with Warburg Pincus there has also been a substantial additional commitment made by the management team. While the new company also says that significant further capital can be deployed to finance future business expansion and reinforce the emerging value proposition of McGill & Partners.

Steve McGill will lead the firm, joined by others including: Oliver Corbett, former CFO of Hyperion; Stephen Cross, former Chief Innovation Officer of Aon Risk Solutions; Denise Garland, former COO of Tokio Marine Kiln; and other senior insurance sector executives.

Dominic Casserley, former President and Deputy CEO of Willis Towers Watson, and Tim Wright, also previously of WTW, will join McGill & Partners as non-executive directors, adding to the heavyweight industry experience at the firm.

Steve McGill, CEO, commented on the launch, “Our ambition is to create a new, best-in class specialty risk solutions business that will bring capital closer to clients and open up an alternative distribution channel for the benefit of clients and carriers. We launch with a new and highly differentiated value proposition that will deliver an unprecedented level of client transparency and alignment. We have assembled a highly experienced leadership team and strong support from a leading global private equity firm. I am excited about building a world-class business and capitalising on the opportunities that a rapidly changing market environment will bring.”

Dan Zilberman, Warburg Pincus Head of Europe, added, “We are excited to partner with Steve and his talented team of senior industry executives to create a new transatlantic market-leader in risk solutions. As a long term investor in the insurance brokerage and insurance sectors, we see this team bringing incredible value and choice to both clients and carriers. Our joint mission is to build a leading specialty risk solutions business focused on independence, alignment and choice.”

The financing is expected to close this month after which the new broking entity will be up and running.

It appears reinsurance is not in the firing line for McGill & Partners at this time, but as it expands anything is possible.

The potential for a new strategic, capital and structure agnostic, corporate and large commercial broking house to emerge and gain traction is an interesting one though, as the ILS market increasingly looks to large corporate risks as a potential source of new return from closer to the start of the market value-chain.

Of course, overall, launches such as this and the one from Stephen Catlin of Convex this week, serve to underscore the attractiveness of the insurance and reinsurance space to major private equity and institutional investors.

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