Last month saw the announcement of one of the Australian insurance industry’s more significant acquisitions in recent years. Marsh, the world’s biggest brokerage, said it was acquiring Melbourne-based Honan Insurance Group.
In a soon to be published interview with Insurance Business TV, Honan’s CEO, Andrew Fluitsma (pictured above), openly answered IB’s questions about the deal.
Fluitsma said all of the documents are signed and assuming Australia’s regulators officially approve the acquisition – which, he said, is expected – the deal will be complete.
One key question put to the Honan CEO concerned his firm’s well-established role as an alternative. IBTV asked if some members of the Honan leadership team expressed reservations about the Marsh deal?
“No,” said Fluitsma. “Because you go through a long period of due diligence and by the time you get to a decision making point, you absolutely know, full well, the right fit for your business.”
He said, as CEO, he considered the personalities in his team, the client base, “our prospects, our ambitions, and everything lined up with what Marsh could provide our business moving forward.”
Fluitsma also said lots of other businesses were interested in acquiring Honan.
“We didn’t just sit there and speak unilaterally with Marsh,” he said.
The Honan CEO also suggested that even he was surprised by how well matched the firms were.
“But would I say, ‘reservations’ [about the deal]? No, not at all,” he said.
IBTV asked Fluitsma to run through some of the reasons why his brokerage decided to join Marsh.
“Our organisation is doing incredibly well in the middle market and the corporate risk area,” he said. “We are doing a lot to be best of breed in the strata and high-end strata property sector.”
Fluitsma said this position as “a middle market giant” integrates “incredibly well with Marsh’s ambitions to be the dominant broker across all sectors of the market.”
He described both the risk management capabilities of Marsh and his own firm’s middle market capabilities as “incredible.”
“[With] the two organizations in the Pacific region working together we have ambitions to bring the best of breed in every sector to market and that was obviously Marsh’s objective and certainly incredibly appealing to us,” said the CEO.
Fluitsma suggested he sees joining Marsh as a progressive forward step.
“What I would say is that our brokers are institutional style, very sophisticated insurance brokers who have been in the industry for a long time,” he said. “We’re really looking to take a progressive step - and not a step sideways or backwards - and what better step and what better challenge [than] to join the biggest in the world?”
IBTV asked Fluitsma how he justified the deal given that his firm’s challenger ethos was built around being an alternative to the big brokerages?
“It’s [the deal] an absolute testament to what we’ve done,” he said. “The fact that Marsh hasn’t made an acquisition in this country for as long as I can remember - and I’ve been in the industry for quite a period of time - the fact that they want to come after this challenger ethos and they want to bring what we have to their offering is just testament to the fact that we have challenged hard and we have been successful.”
Fluitsma said his firm’s client base won’t see “much of change.”
“What we’re taking to our client base and our prospect base [about] will just be adding a breadth of resources that the biggest broker in the world has,” he said.
In a media release announcing the acquisition, Nick Harris, Marsh’s CEO in the Pacific, said his firm has “the highest regard for the management and team at Honan.”
“The addition of Honan’s highly complementary capabilities, particularly in corporate risk and strata insurance, will enable Marsh to deepen the specialist expertise we provide to clients across Australia and New Zealand, and support them in managing the risks they now face,” said Harris.
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