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Pandemic fuels global broker M&A activity

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The COVID-19 pandemic accelerated global merger and acquisition activity among broking groups last year but the sector remains relatively fragmented, UK-based consultancy Insuramore says.

“The pandemic had the effect of encouraging such activity rather than diminishing it with many hundreds of transactions concluded globally,” the company says

Further deals flagged for completion this year include the Aon and Willis Towers Watson merger and acquisitions by Howden, Chedid Capital, Ardonagh Group, Arthur J. Gallagher, Marsh McLennan and Amwins.

Insuramore says the top 20 groups last year accounted for just over half global insurance broking revenues, with total fees and commissions earned estimated at $US117.7 billion ($152 billion).

“If not exactly emerging as lockdown winners, the global pandemic had much less of an impact on insurance broking groups than it did on enterprises in some other industries,” the consultancy says.

Discounting inflation, global broking revenue grew 3-5%, with reinsurance and wholesale broking, plus commercial and private individual property and casualty retail broking, tending to fare better than the employee benefits area.

Commercial property and casualty retail broking fees and commissions were estimated at $US55.1 billion ($71.2 billion), while $US11.2 billion ($14.5 billion) came from private individuals. Employee benefits plus life and health retail broking accounted for $US37.6 billion ($48.6 billion), $US5.3 billion ($6.8 billion) came from reinsurance and $US8.4 billion ($10.9 billion) from wholesale broking.