What the Marsh Acquisition of Bluefin tells us about the current market

mergers and acquisitions

It’s not a bolt out of the blue(fin) by any means, given that it was announced back in November. But this week saw the completion of Marsh’s takeover of insurance broker brand Bluefin in a £295 million deal from AXA.

It seems that the Bluefin acquisition will lead to the merging together of two large brands from within the UK landscape, as Bluefin combine with Jelf, who were similarly acquired by Marsh at the end of 2015.

Which means?

Well, it means the formation of a new organisation comprising more than 80 locations across the UK and, one would imagine, a fairly heavyweight player in brokering services to the UK SME sector.

It also seems to highlight the growing propensity for mergers and acquisitions in the insurance broker sector.

Add the two (Jelf and Bluefin) takeovers by Marsh in the past twelve months to other deals, such as the Autonet acquisition by Towergate backers HPS, or Aon’s purchase of cyber-risk management specialists Stroz Friedberg. Suggesting an industry awash with new acquisition opportunities.

Not to mention the fact that Bluefin themselves have been actively acquiring new brokers to their own ranks throughout the previous 12 months.

So will there be more?

It’s certainly likely, of course.

Quite how it transpires, who knows? Are there any more major opportunities for retail acquisition? Marsh’s expansion into the UK market has been pretty hefty of late, is it too much of a stretch to think that other big names such as Aon won’t follow suit, in one form or another.

Or perhaps the Aon acquisition of Friedberg offer another indicator of the way future acquisitions play out. Niche markets, in particular cyber-risk, will surely grow in attractiveness as they come to greater prominence in the coming years.

But then again, given the uncertainty over Brexit and the impending inauguration of Donald Trump in the US, 2017 may yet give rise to a touch more caution. Albeit temporarily.

Effects on the market

In essence, how acquisitions such as we’ve seen with Bluefin are managed, will dictate the level of effect it will have on the market. They have, after all, been taken over by a global giant. Will that mean an incessant push towards homogenised corporatism, for example?

The culture of the insurance broker, especially in the UK, has been traditionally defined by its personnel and their relationships with the client. In an industry where brokerages are under pressure from direct sell insurance, any perceived move towards less personal corporate cultures could spell danger.

Of course, there’s always the other side of the coin. Jelf and Bluefin coming together does offer a potentially more joined up approach to insurance offerings across greater parts of country. The potential for unified systems and processes that opens up greater flexibility in what they can offer.

Effect on customer choice

The traditional market is changing, irrespective of mergers and acquisitions. Technology and the embrace (however slowly) of FinTech / InsurTech is driving new routes to market and encouraging the development of specialist schemes, products and services to meet the needs of a changing world, and changing consumer need.

The spate of acquisitions won’t necessarily alter this, and might even hasten the adoption of new technology, providing more opportunity to invest in new modes of operation, new methods of engagement and greater innovation. Businesses previously unable or uncertain about embracing new methods of operation may now see greater ability or opportunity to do so.

While those operating in the specialist fields like cyber-insurance, or the Internet of Things,  may find themselves brought into the fold as their stock rises.

There’s always a danger with large acquisitions that customer choice grows limited. As names on the High St get fewer, so the customer’s options narrow. Is that what the Bluefin acquisition points to?

Maybe, but probably not.

For the moment at least.

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