Speaking to The Insurer TV, Wakefield said the deal – which will see Gallagher acquire Willis Re’s treaty business for a fee that could rise to $4bn – was a positive for markets and offered clients a new global alternative.
“There’s a huge amount of energy and excitement at Gallagher Re as you might imagine, and there’s a lot of excitement in the market as well, with customers and with markets. It’s just such an exciting moment to be able to bring the talent at Gallagher Re together with the huge amount of talent that sits at Willis Re,” he said.
The deal – the largest in the company’s history – will firmly position Gallagher as the third largest reinsurance broker behind only Aon and Guy Carpenter.
Explaining the rationale for acquiring Willis Re, the London-based executive said the deal would allow Gallagher Re to accelerate its product development and distribute products at a speed and pace that “we haven’t seen before”.
“We operate in a lot of niche sectors and a lot of areas that meet the unmet demand for customers and that’s been a huge success story as part of the Gallagher Re story to date,” he explained.
Wakefield said Gallagher Re is pushing forward work to help clients navigate the various environmental, social and governance frameworks and to develop model capability that helps to identify climate-related challenges.
The expansive intermediary is also gearing up to launch the Gallagher Automated Insurance analytics platform, which will bring AI and machine learning together under one holistic ecosystem for model evaluation that has not been done before.
“That’s before we even start to bring the firepower of Willis to the table,” he said, adding that Gallagher Re is now better positioned to benefit from the “unique” distribution network across the Gallagher group.
Gallagher last month announced a deal to buy Willis Re for an initial $3.25bn, with a $750mn additional consideration payable should the reinsurance broker meet certain third-year revenue targets.
The deal followed a previous agreement in May for Gallagher to acquire Willis Re, certain Willis Towers Watson (WTW) Corporate Risk & Broking business units in Europe and some health/benefits operations. That deal was pulled last month following the collapse of the Aon-WTW combination after litigation brought by the US Department of Justice.
While the earlier deal included WTW’s facultative operations, the transaction unveiled in August does not.
Despite Gallagher Re not taking over WTW’s facultative reinsurance assets, Wakefield said the intermediary already benefits from a “significant” fac capability, adding that it would also look to grow its existing fac business.
“It’s worth pointing out that we already have significant facultative capability and we focus on what’s required to meet the needs of our clients,” Wakefield explained.
“Our commitment is to continue to grow our capability in that space and we will use the most appropriate method to do so,” he added.