New research from Finaccord has calculated for the first time a definitive 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 US$28.5 billion from this activity in a global market estimated to have been worth $48.5 billion in total in 2013, thereby meaning that they accounted collectively for 58.8 per cent of this total.
Aon was the largest competitor with commercial lines revenues of $6.1 billion worldwide in 2013 and it was followed by Marsh at $5.1 billion. Overall, the top 15 broking groups by this measure together earned revenues of $20.9 billion (or 43.1 per cent) of the worldwide total (note that OAMPS Insurance Brokers, ranked 15th in the table, was acquired in April 2014 by fifth-placed Arthur J. Gallagher & Co; however, it is included in the table as it still operated independently of any other broking group during 2013 itself).
Finaccord’s research also shows that across the world’s top 150 commercial non-life insurance broking groups, 67 (44.7 per cent) were headquartered in the US 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 US and Canadian commercial property and casualty markets and the fact that brokers (including independent agents) dominate distribution in both the US and Canada”, commented 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.”
For the majority of the 150 brokers in the ranking, commercial non-life insurance is the most important source of revenues. In fact, 22 of the 150 groups earned more than 90 per cent of their total revenues from commercial lines in 2013 while for 122 this activity made up at least half of their revenues. In fact, as an unweighted average across all 150 groups, commercial lines broking revenues accounted for 64.4 per cent 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”, continued 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 per cent in 2013. It was followed by Howden Broking Group (80 per cent), JLT Group (78 per cent) and RKH Group (74 per cent), meaning that the top four groups by this measure were all UK-based firms. In total, nine groups earned more than 50 per cent of their commercial non-life broking revenues from international markets in 2013.
Finaccord also examined the number of acquisitions made by the 150 groups between January 2012 and June 2014. 61 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,” concluded Bergmann. “In particular, given some of the acquisitions announced recently by Arthur J. Gallagher & Co., which include Noraxis Corporation in Canada and The Oval Group in the UK as well as OAMPS Insurance Brokers, the US-based brokerage may substantially shorten the gap to Willis which is currently ranked third.”