Arthur J. Gallagher & Co. | August 16, 2021
Arthur J. Gallagher & Co. today announced an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson plc. The transaction is expected to close during the fourth quarter of 2021.
"Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher and this acquisition will significantly enhance our global value proposition," said J. Patrick Gallagher, Jr., Chairman, President and CEO. "We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects. I look forward to welcoming the 2,200 new colleagues joining us as part of this transaction to our growing Gallagher family of professionals."
Benefits of the acquisition are expected to include:
Expanded global value proposition within reinsurance brokerage
A broad suite of analytics capabilities including actuarial services, catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
Addition of talented management team
Increased product breadth & offerings
Further leveraging of Gallagher's industry-leading alternative risk and ILS business
Strengthened relationships with major insurance carriers
The operations include all of Willis Re's treaty reinsurance brokerage operations. For the year ended December 31, 2020, these operations generated $745 million of estimated pro forma revenue and $265 million of estimated pro forma EBITDAC. The pro forma 2020 figures include revenues reported in Wills Re's 2020 unaudited financial information, and reflect known growth, as well as Gallagher's estimate of "breakage", defined as known lost business and the departure of key brokers and other employees, as well as normalization of operating expenses and additional investments. Willis Re's treaty reinsurance business operates in 24 countries, places over $10 billion of premium annually and represents over 750 insurance and reinsurance company clients.
Key Transaction Terms
Under the agreement, Gallagher will acquire the combined operations for an initial gross consideration of $3.25 billion, and potential additional consideration of $750 million subject to certain third-year revenue targets. Gallagher intends to finance the transaction using cash on hand, including the $1.4 billion of net cash raised via its May 17, 2021 follow-on common stock offering and the $850 million of net cash borrowed via its May 20, 2021 30-year senior note issuance, short-term borrowings and additional free cash generated before close. The funding contemplates Gallagher maintaining its investment grade debt rating.
Integration is expected to take approximately 3 years with total non-recurring integration costs estimated to be approximately $250 million. After giving effect to these assumptions and pro forma results discussed above, the acquired operations would have been approximately 5% accretive to Gallagher's 2020 adjusted GAAP EPS excluding earnings from clean energy investments and 9% accretive to Gallagher's 2020 adjusted GAAP EPS excluding amortization and earnings from clean energy investments.
Pro forma revenues – Pro forma revenues reflect Gallagher's estimate of revenues reported in the acquired operations' 2020 unaudited financial information, reflecting known growth, as well as "breakage", defined as known lost business and the departure of key brokers and other employees.
Other Cost Adjustments - In addition, specific costs have been identified as adjustments to the acquired operations' 2020 financial statements in order to better reflect Gallagher's estimate of pro forma. Specifically, these cost adjustments include the normalization of operating expenses to reflect the extraordinary impact of the COVID-19 pandemic in 2020 and additional investments in operations attributed to the target business based on the estimated costs to provide specific services from the center.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co. a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 57 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.
LoadStar and K2 Insurance | October 05, 2021
Decision Research Corporation (DRC), an industry-leading provider of cloud-based enterprise solutions for the P&C insurance sector, announced today K2 Insurance Services has successfully deployed their innovative LoadStar Customs Inspection Insurance product on the DRC Insurance Platform. Via the DRC Agent Portal, freight forwarders and Customs Brokers are now able to purchase coverage online, submit claims, and are issued certificates in a single session, with full policy service, billing, and claims enabled for back-office processing.
LoadStar, developed by K2 in partnership with a global insurance leader, is the first insurance solution to solve the problem of unpredictable shipping container inspection costs. President of LoadStar Insurance Services, Dan Williams said, "By creating a predictable cost to eliminate an unpredictable threat, LoadStar can mitigate uncertainty and protect profit margins to keep containers flowing smoothly." Due to the novel nature of the product, K2 required a platform that could handle any risk, not just established insurance products.
DRC is our longtime technology partner, so we felt extremely confident turning to them to help us get this unique new product to market quickly and in a cost-effective manner. We were able to get LoadStar up and running on the DRC Insurance Platform, and totally integrated with our enterprise architecture, in just a few months. We take pride in serving our customers using the best and most efficient systems available to the insurance industry, which is why we rely on the DRC Insurance Platform.
- Rebecka Kilkenny, CIO of K2.
Beyond direct portals and servicing, the DRC Insurance platform includes enterprise rating, document generation and storage.
At K2 we're always looking to launch creative programs run by exceptional people. We consider it part of our core mission to provide innovative products and exceptional results in specialty markets, and DRC's technology empowers us to do exactly that.
- Mark Smith, K2 President.
Innovative thinking is part of DRC's DNA, so we're always excited to see how visionary clients like K2 are able to use our solutions to create a brand-new market. We have been honored to be part of their success and growth for the past seven years and look forward to continuing our partnership for many more to come.
-Karen Yamamoto, CEO of DRC.
About LoadStar and K2 Insurance
LoadStar Customs Inspection Insurance was born out of a decade long "thorn in the side" problem of Importers who have never been offered a solution to offset the unpredictable financial sting of a Customs Inspection. Today we pride ourselves on offering a first ever solution to deliver "a predictable cost to eliminate an unpredictable threat". LoadStar is there to cover your inspection fees from an X-Ray Exam to a Tailgate Exam to a full devanning of your container in an Intensive Exam. LoadStar covers the expense of the invoice and reimburses the claim in 24-48 hours. Fast and efficient processing of your invoice ensures you'll be back up and running and protecting your profit margins and future business. K2 partners are top-tier insurers and MGAs in the specialty areas they serve. In addition to working with financially sound companies, we also employ robust, modern technology that aligns with our expansion plans and allows us to bring products to the marketplace efficiently and quickly. We understand how important it is in today's environment to have a policy administration system nimble enough to accommodate new products, enhancements, and regions. We're continually looking for acquisitions and growth opportunities. Through a combination of specialized, successful MGAs and well-capitalized, nationwide insurance carriers, K2 offers a compelling value proposition to the marketplace.
DRC provides innovative, cloud-based, enterprise solutions to P&C insurance companies looking to boost their business development efforts, reduce administrative overhead, and accelerate speed-to-market for their products through automation. RS X Rating, DRC's no-code rating solution, gives actuaries the ability to configure powerful automation functions without IT assistance, and to price risks and model products, no matter how complex, all through a familiar Microsoft Excel® interface. DRC's flagship product is the DRC Insurance Platform, a full-service policy administration system, including portals, quoting, billing, claims, and advanced analytics, powered by RS X Rating, and engineered to streamline internal processes and empower business users within a secure and robust enterprise ecosystem. DRC has remained committed to total customer satisfaction throughout its 50-year history, and its clients, running the gamut of size and scope from large global carriers to regional start-ups, continue to rely on DRC's trusted solutions to manage over $7 billion in written premium.
Ameritas | January 17, 2022
Ameritas has introduced enhancements to its whole life insurance products, creating additional options to help meet client needs while maintaining current product competitiveness. The four new whole life insurance products are Ameritas Access Whole Life, Ameritas Growth Whole Life, Ameritas Growth 10-Pay Whole life and Ameritas Value Plus Whole Life. The products are issued by Ameritas Life Insurance Corp. and Ameritas Life Insurance Corp. in New York and became effective Jan. 1.
"We are excited about the reprice of the Ameritas whole life products, as the entire portfolio has been updated to include enhanced and consistent features,The purpose and performance of each product has been positioned to complement one another. Whether you're looking for early access to guaranteed cash value, long-term cash value accumulation or low cost guaranteed death benefit protection, Ameritas has strong options."
-Craig Schommer, vice president, individual product development.
Ameritas has introduced enhancements to its whole life insurance products
The products were repriced to address the lower guaranteed contract rate and utilize a range of contract rates to accomplish different goals for each product. Ameritas Access Whole Life maintains strong early guaranteed cash value performance. A clear choice for clients seeking long-term accumulation, Ameritas Growth Whole Life.
Ameritas Growth 10-Pay Whole Life offers improved long-term current cash value accumulation with a 10-year short pay. Ameritas Value Plus Whole Life is staying focused on low-cost death benefit protection while remaining competitive with other options available in the market.
Additional features include a non-direct recognition for dividends when using variable loans, a more flexible funding range using the Flexible Paid-Up or Level Term riders and the Care4Life Accelerated Death Benefit Rider can now be used across all four whole life insurance products.
Ameritas is a marketing name for Ameritas Mutual Holding Company and its affiliated subsidiary companies, including Ameritas Life Insurance Corp. and Ameritas Life Insurance Corp. of New York. Founded in 1887, Ameritas offers a wide range of insurance and financial products and services to individuals, families and businesses. These products and services include life insurance; annuities; individual disability income insurance; group dental, vision and hearing care insurance; retirement plans; investments; asset management; and public finance. Securities offered through affiliate Ameritas Investment Company, LLC., member FINRA/SIPC and investment advisory services offered through affiliate Ameritas Advisory Services, LLC.