ABIR: Towers Watson acquisition is likely positive

JLT will acquire the reinsurance brokerage business of Towers Watson for $250 million. The businesses will be merged and branded for a transitional period as JLT Towers Re.  The acquisition is expected to be complete before the year’s end.

The combined business, according to JLT, will see combined revenues of $266 million and employ 700 people in 17 countries. Ross Howard, who is currently head of Towers Watson’s reinsurance arm, will become Executive Chairman of JLT Towers Re. JLT RE CEO Alastair Speare-Cole will become CEO of the combined business and chairman Alan Griffin will step down but retain a board and advisory role.

Brad Kading told Bermuda:Re that continued broker consolidation was a positive for Bermuda reinsurance players. He said, “The largest three brokers control an overwhelming market share.  The JLT/Towers Watson merger arguably creates a stronger second tier player in the market.  In this case consolidation is likely viewed as a positive. The reinsurers are dependent on good relationships with the largest brokers.  They all provide excellent service to their clients.”