World’s Top 15 Commercial Lines Brokers Write 43% of Business: Finaccord

The world’s top 15 insurance brokers write more than 43 percent of the commercial lines property/casualty business globally, according to a new ranking by London research firm Finaccord.

The same report says that the top 150 brokers write almost 59 percent.

Finaccord calculated a ranking of the world’s top 150 broking groups by revenues earned from commercial non-life (P&C) insurance, excluding revenues from personal lines, employee benefits, wholesale insurance and reinsurance.

In total, the top 150 brokers earned revenues of $28.5 billion from this activity in a global market Finaccord estimates to have been worth $48.5 billion in total in 2013. Thus these 150 brokers collectively accounted for 58.8 percent of this total market, according to Finaccord.

Overall (see Finaccord’s chart), the top 15 brokerage groups by this measure together earned revenues of $20.9 billion – or 43.1 percent – of the worldwide total.

In this ranking, Aon was the largest competitor with commercial lines revenues of $6.1 billion worldwide in 2013. It is followed by Marsh at $5.1 billion, then Willis with $2.1 billion. The top three write more than 25 percent of the market.

U.S.-Based

Finaccord’s research also shows that across the world’s top 150 commercial non-life insurance broking groups, 67 (44.7 percent) are headquartered in the U.S. with a further 24 based in the UK, 14 in France, 12 in Germany and eight in Canada.

“The strong presence of North American brokers in the ranking is primarily due to the huge size of the U.S. and Canadian commercial property and casualty markets and the fact that brokers (including independent agents) dominate distribution in both the U.S. and Canada,” said Bernd Bergmann, a consultant at Finaccord. “In addition, a number of large brokers in North America are driving their growth through acquisitions while the majority of their counterparts in Europe rely more on organic growth.”

Most Important Source

For the majority of the 150 brokers in the Finaccord ranking, commercial non-life insurance is the most important source of revenues. In fact, 22 of the 150 groups earned more than 90 percent of their total revenues from commercial lines in 2013 while for 122 this activity made up at least half of their revenues. As an unweighted average across all 150 groups, commercial lines broking revenues accounted for 64.4 percent of total revenues.

“While most brokers are also active in other areas, including personal insurance, employee benefits, wholesale insurance and reinsurance, their main focus typically lies in selling property and casualty insurance products to commercial customers,” said Finaccord’s Bergmann.

When ranked according to the proportion of commercial non-life broking revenues secured outside of their home market, Willis came first with a figure of 90 percent in 2013. It was followed by Howden Broking Group (80 percent), JLT Group (78 percent) and RKH Group (74 percent) meaning that the top four groups by this measure are all UK-based firms. In total, nine groups earned more than 50 percent of their commercial non-life broking revenues from international markets in 2013.

Acquisitions

Finaccord also examined the number of acquisitions made by the 150 groups between January 2012 and June 2014. Sixty-one of the 150 groups had made at least one acquisition relevant to commercial lines broking and 10 had made at least 10 such acquisitions. On this measure, UK-based Towergate was ranked first with 48 acquisitions, ahead of Arthur J. Gallagher & Co. and HUB International with 43 each, USI Insurance Services with 27 and AssuredPartners with 26.

“The global ranking may see some important changes in future if competitors such as Arthur J. Gallagher & Co., HUB International and Towergate continue purchasing other brokers at such a rapid pace,” said Bergmann. In particular, Bergmann cited the recently-announced acquisitions of Arthur J. Gallagher & Co., which include Noraxis Corp. in Canada and The Oval Group in the UK , as well as OAMPS Insurance Brokers. He said these deals could allow the U.S.-based Gallagher to shorten the gap to Willis, which is currently ranked third.

Finaccord’s report also includes a ranking of the world’s top 150 commercial non-life insurance brokers according to their total revenues including personal lines, employee benefits, wholesale insurance and reinsurance. By this measure, the ranked order of the top 15 in 2013 is as follows: 1) Marsh & McLennan; 2) Aon; 3) Willis; 4) Arthur J. Gallagher & Co.; 5) Wells Fargo Insurance Services; 6) JLT Group; 7) BB&T Insurance Services; 8) Brown & Brown; 9) HUB International; 10) Lockton; 11) April Group; 12) USI Insurance Services; 13) NFP; 14) Gras Savoye; 15) Towergate.