WTW announces treaty reinsurance broking re-entry with Bain Capital joint venture

Today, broking group WTW has confirmed its re-entry to the treaty reinsurance broking sector, through a joint venture established with specialist private investment firm Bain Capital.

The company had exited the treaty reinsurance broking space when it sold certain reinsurance broking parts of its business and Willis Re to AJG in 2021.

A return had long been discussed and now with an investor presentation being held today, WTW has confirmed its re-entry to the treaty reinsurance broking market.

WTW is set to only hold a minority share in the joint-venture reinsurance broker established with Bain Capital, a leading private investment firm with a liking for reinsurance-linked opportunities.

“This new company will combine WTW’s rich history, leading global network and expertise in insurance broking, consulting and technology with Bain Capital’s scaled team of insurance industry experts and proven track-record of building and growing innovative insurance businesses across the value chain,” WTW explained.

The treaty reinsurance joint venture will leverage WTW’s resources, global presence, analytical capabilities and brand, the company said.

It holds minimised execution risk for WTW, given the venture being established with a strong partner like Bain Capital, WTW further explained.

Further, WTW believes the treaty reinsurance venture will operate with an “attractive margin profile”, while enhancing its business mix and also offering high-growth potential as it scales-up.

With WTW having also divested its insurance-linked securities (ILS) and capital markets focused arm to Gallagher as part of the 2021 transaction, it will be interesting to see whether the new venture with Bain Capital looks to also re-enter this space and provide structuring, bookrunning and capital advisory services for ILS markets and cedents seeking to access alternative sources of reinsurance capital.

Presumably it will, in some form. As, a reinsurance broker without an ILS capital capability is rare these days, although this is a sometimes challenging segment to get significant traction in, unless senior talent can be sourced from rivals.

Hiring is likely to be a key-focus for WTW now, as it looks to build-up its reinsurance treaty capabilities under the new JV. There have been rumours for months of senior people and whole teams being suggested as ready to join a new WTW Re broking start-up, so it will be interesting to see if any of those become reality now.