US brokerage behemoth Gallagher’s acquisition of Irish insurance group Innovu seems likely to be a harbinger of more upheaval across the Irish brokerage landscape. It has already undergone radical transformation in recent years amid an unprecedented wave of consolidation.
Backed by MML Capital Partners, Innovu was one of several Irish outfits, bankrolled by private equity, to wade waist-deep into the market, snapping up as many smaller, independent brokers as they could over the past four years or so. In that time frame, Innovu acquired five regional brokers — Sheridan Insurances, Wexford Insurances, Goggin Insurance Brokers, and Cullen Insurances and Wexford-based PE Kelly Insurances in October last year. Now with the backing of Gallagher — which boasts a stock market value in excess of $33 billion — Innovu chief executive Ronan Foley expects the pace of expansion to pick up over the coming years.
“We will continue on the acquisition trail and that will be accelerated now,” he said. Naturally, having the financial firepower of an S&P 500-listed company behind it means Innovu will be able to move “more quickly” on “bigger opportunities”, he said. But while there will be a focus initially on “organic growth”, Foley said the ambition was for Gallagher to be the number one broker in Ireland, and the intention was to “make that happen over the next few years”.
Gallagher’s acquisition could also be seen as a vote of confidence in an Irish market that appeared to be nearing its peak late last year with valuations surging to eye-watering levels. Despite the pace of consolidation in recent years, Foley says there are still opportunities for growth here. The Irish sector has typically been [characterised] “by a large number of brokers in a relatively small market ... that was always gonna be ripe for consolidation at some point”.
Compared to the UK market, which is “kind of at the end of that phase”, Ireland continues to be “the next best opportunity”. If he’s right, more deals are on the way.
