01/02/2019 - 10:49

Gallagher on growth path

01/02/2019 - 10:49

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Insurance broker Gallagher has recently completed two bolt-on acquisitions in Perth as the sector readies for a merger of two of the largest global players.

Gallagher on growth path
Simon High has focused on integrating three different cultures. Photo: Gabriel Oliveira

Insurance broker Gallagher has recently completed two bolt-on acquisitions in Perth as the sector readies for a merger of two of the largest global players.

Its purchase of Super-Advice and Aurenda comes after two much larger acquisitions, of Wesfarmers subsidiary OAMPS and local firm Strathearn.

Together with Gallagher’s legacy business, these acquisitions made it the second largest insurance broker in WA, according to BNiQ data, with 96 brokers.

That puts it just ahead of local firm EBM and global player Willis Towers Watson, which also bulked up its Perth presence with an acquisition – the 2015 purchase of CKA Risk Solutions.

A much bigger change is looming, with global players Marsh & McLennan and Jardine Lloyd Thompson looking to finalise their $US5.6 billion merger in coming months.

Marsh has started preparing for completion of the deal by announcing senior staffing moves – these include JLT’s Australian chief executive Nick Harris becoming the Pacific region chief executive for the merged group.

For WA, the merger means the number one firm (JLT) and the sixth-ranked firm (Marsh) will combine their operations.

That is seen as an opportunity by competitors, including Gallagher area director Simon High.

“We went through acquisitions a while ago, we are now stable, we have the team in place, and I think that presents an opportunity for us,” Mr High told Business News.

The former engineering executive joined Gallagher in the middle of last year in what was an unexpected move.

Mr High said he was looking for a change, as was Gallagher.

“I was approached by Gallagher and wondered why they were asking me about the job,” he said.

“They said we don’t want a broker, we want someone who sees things from a client perspective.”

Mr High said Gallagher also wanted someone who could help integrate three very different businesses.

While Gallagher is a global business with a corporate focus, OAMPS had a retail market focus and Strathearn had a very strong entrepreneurial, independent culture.

“There were three very distinct cultures when I joined that weren’t particularly well integrated,” he said.

“They were under one roof but the integration wasn’t making the progress it needed to make, which I think is why Gallagher was looking for someone who could push it along with a bit more vigour.”

Mr High said that over the course of his engineering career, he had seen many failed acquisitions, often because the buyer imposed its systems.

“Doing the deal is just the first part, getting value from the deal is where the real skill is,” he said.

Mr High said bringing all staff under one roof at Gallagher’s new CBD office was a key step in pulling everyone together.

“You cannot integrate and get a one-team culture when you have three different offices, it just doesn’t work,” he said.

“You also have to make sure everybody is treated in the same manner, with respect.

“That can sound like a soft and woolly thing, but you need to get everybody to mix and talk openly and share.

“Getting to a point where there is a genuine desire to help each other rather than hold on to your own contacts, that was probably the single biggest factor.”

Mr High said he was pleased with the number of Strathearn people who had stayed.

“One thing I’m really pleased about is that many senior people in the Strathearn business have now taken bigger roles in the company,” he said.

“They are now senior people in Gallagher Australia.”

While Strathearn co-founder Ron Fuller retired after a three-year earn-out period that ended in December, co-founder Ted Hicks has been retained as a consultant.

Diversification

Gallagher’s recent WA acquisitions have diversified its service offering.

In September it bought Super-Advice, which offered superannuation and employee benefit consulting services.

Founded in 2002, Super-Advice had a team of 16 people in West Perth led by Robert O’Shea who have shifted to Gallagher’s CBD office.

That was followed in November by the acquisition of Aurenda, a specialist provider of injury risk management services.

Mr High said Gallagher was keen for more growth.

“The company is very focused on growth through acquisitions, we’re always on the lookout for well-managed broker houses that we can bring in and give us more volume and profile,” he said.

He confirmed Gallagher’s goal was to double in size over five-year periods.

“We were at $200 million turnover (in Australia) and our stated strategy is to grow to $400 million,” he said.

“We are now 18 months in, and I would say through a combination of organic growth and acquisitions, we are on track to meet our five-year goal.” 

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