The London-based insurance and reinsurance broker Howden Group Holdings Ltd. said on Thursday that they have acquired the American reinsurance broker TigerRisk Partners LLC.
Sources close to the deal said the purchase price was $ 1.6 billion.
The combined reinsurance business will have close to $ 400 million in revenue from reinsurance brokers and employ about 450 people, a statement from Howden said.
The two companies have small operations or geographical overlap, Howden Group’s CEO David Howden and Rod Fox, CEO and co-founder of TigerRisk, said in an interview on Thursday.
Howden’s leading agency and insurance brokerage business will complement TigerRisk̵7;s reinsurance brokerage and capital markets advisory business, Howden said.
In addition, the deal will allow TigerRisk to take advantage of Howden’s international relations and increase Howden’s presence in the United States, said Mr. Fox.
“Scale is important in this industry,” said Mr. Howden.
Stamford, Connecticut-based TigerRisk, the fourth-largest reinsurance broker, reported $ 145 million in gross revenue in 2020, according to Business insurances latest catalog of reinsurance brokers. Its business composition was 83% property and 17% damaged, and it had 220 employees.
TigerRisk was founded in 2008 by Mr. Fox and fellow industry veteran Jim Stanard. The private equity company Aquiline Capital Partners LLC invested in the company in the company in 2009 and sold its share in 2012. In 2020, the private equity company Flexpoint Ford LLC bought an unspecified share in the company.
According to a statement from Flexpoint Ford, TigerRisk has accelerated recruitment over the past two years, which has increased its staff base by almost 50% and increased its annual sales by 25%.
Discussions between Howden and TigerRisk began at a high level before December, became more serious in December and they began to “work seriously” after New Year, said Mr. Fox.
Mr. Fox will be the CEO of Howden Tiger, the reinsurance business of the merged company.
The deal comes at a challenging time for reinsurance buyers.
“On the disaster side, it is a particularly difficult market,” for reinsurance, said Mr. Fox. “The border is difficult to cross. June 1 in North America was a severe renewal and July will be more difficult,” he said, adding that cyber capacity was the most difficult reinsurance capital to obtain after the disaster.
Mr. Howden said conditions were similar for the broker’s primary insurance clients. “It’s a challenging market out there for our customers at the moment.”
The transaction is subject to regulatory approvals.