BMS, Gallagher ramp up Australian insurance acquisitions in 2023

Foreign brokers BMS Group Ltd. and Arthur J. Gallagher & Co. increased their Australian deal activity in 2023 even as M&A volume in the insurance space declined Down Under.

The number of insurance deals involving whole companies in Australia dropped to 24 in 2023 from 36 in 2022 and 35 in 2021, according to an S&P Global Market Intelligence analysis.

This downturn mirrored the trend across the insurance sector in the Asia-Pacific region last year, which saw 92 transactions as opposed to 120 in 2022.

Overall, BMS and Gallagher were the most active acquirers in the country last year based on deal count, reflecting an increase in the number of acquisitions involving foreign companies. Nine of the 24 acquisitions of whole companies in 2023 involved foreign buyers primarily based in the UK and the US, up from five in 2022 and eight in 2021.

BMS especially boosted its Australian dealmaking in 2023, buying the most number of businesses in the country with its acquisitions of Austbrokers Coast to Coast Insurance brokers, Western United Financial Services Pty. Ltd., Gard Insurance Pty. Ltd. and Bluebook Insurance Brokers Pty Ltd.

The string of acquisitions aligned with BMS' aim to expand its footprint in the country and diversify its operations, according to press releases announcing the deals. The insurance broker entered the Australian market in 2022 with the acquisition of SRG Group Pty. Ltd.

Gallagher also acquired more whole companies in 2023, buying Professional Insurance Solutions Australia Pty. Ltd., Mavco Insurance Group Australia Pty. Ltd. and Edgar Insurance Brokers. Including the purchase of Insurance Risk Solutions credited to the Arthur J. Gallagher & Co (Aus) Ltd. subsidiary, Gallagher tied with BMS as the most prolific dealmaker in the Australian insurance sector for 2023.

The acquisition of Honan Insurance Group Pty. Ltd. by Marsh & McLennan Cos. Inc. subsidiary Marsh LLC from TA Associates Management LP may have been the biggest insurance deal in the country in 2023 based on transaction value. The companies did not disclose the official transaction value, but third-party reports valued the deal at about A$700 million.

Based on that estimate, the Honan deal may be the second-largest deal between 2021 and 2023, next only in size to TAL Dai-ichi Life Australia Pty. Ltd.'s A$900 million acquisition of Westpac Life Insurance Services Ltd. in 2021.

Acquiring Honan expands Marsh's Australian middle-market business and footprint in the Asia-Pacific region, Marsh & McLennan CEO John Quinlan Doyle said. Honan, which serves more than 30,000 clients across Asia, also gives Marsh access to other markets, including New Zealand, Singapore and Kuala Lumpur.

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