After news emerged today that Willis Towers Watson could be looking to sell its stake in wholesale and London broking specialist Miller, the pair have confirmed that they are actively “considering strategic alternatives.”
Willis Group acquired an 85% interest in Miller Insurance Services LLP back in 2015, as the pair sought to create a leading wholesale and London market focused broking platform.
As part of that deal, Willis and Miller’s wholesale businesses moved to trade under the Miller brand, operating as a stand-alone legal entity and separate Lloyd’s broker.
That element now seems to be the piece of the Willis Towers Watson universe that could be for sale.
Other parts of Miller, treaty reinsurance, UK Corporate client and Financial Institutions, all transferred under Willis, so it seems these are not subject to the discussions.
Willis Towers Watson confirmed in a statement that, “Willis Towers Watson and Miller can confirm they are exploring strategic alternatives for Miller.”
Adding, “Since the formation of Willis Towers Watson in 2016, the company strategy has continued to evolve. Both parties agree that now is the appropriate time to consider next steps for Miller to maximise growth, continue to provide best in class client service and solutions, and enhance opportunities for colleagues.”
It’s interesting to consider the potential for there to be a larger merger and acquisitions (M&A) goal being worked towards here.
It’s approaching one year since the Aon-WTW discussions came to light, meaning these could be rekindled in the coming weeks after a cooling off period expires.
Strategically, could there be something deeper going on that just WTW looking to monetise its investment in Miller and shed majority responsibility for the wholesale brokerage arm?
If a bigger deal of some description was seen as in WTW’s future, this perhaps could be seen as laying some foundations for that, perhaps?
Speculation aside (see below), WTW said that it and Miller expect to “have ongoing relationships in certain aspects of the business where they remain closely aligned.”
Suggesting that WTW could retain a share, or at least some level of strategic alignment.
The pair said that they won’t provide further comment until this strategic review is completed.
The news is certain to fire up the insurance and reinsurance broker M&A rumour mill and who exactly could be a suitor for the majority stake in Miller is uncertain at this time.
The market is always full of discussion regarding a potential WTW broking arm sale to Aon, but sources suggest Gallagher is also seen as a front-runner for this potential deal.
With a number of independent broking groups flush with capital and perhaps eager for bolt-on M&A related growth (names such as Hyperion and Integro come to mind), now might be an opportune time for WTW to shed much of its financial responsibilities to this wholesale/London area of insurance and reinsurance broking, enabling it to double-down on the other parts of its business (potentially with even bigger deals ahead, as our speculation above suggests?).
It’s worth also pointing out that Miller also owns Lloyd’s accredited and London headquartered insurance and reinsurance broker Alston Gayler (AG), a broker with a buoyant industry loss warranty (ILW) practice it acquired at the end of 2018. It’s assumed that firm would be part of any arrangement or sale by WTW.