Marsh lines up three more African insurance acquisitionsComment on this story
Marsh was eyeing further African acquisitions with three new insurance broking businesses set to be bought during the course of this year and next, the US-based insurance brokerage said this week.
Marsh said the transactions were on line to be finalised by the end of this year or the start of next year. They follow the announcement last week that Marsh South Africa had sealed a black empowerment deal with Kapela Holdings.
East Africa is a significant gap for the firm, which has a presence in 100 countries and has now set a goal to become a powerhouse in pan-African insurance. It wants to expand its sub-Saharan Africa office network aggressively as its global clients already have interests in the region.
By integrating its global clients’ African risks into the company’s existing global risk management programmes, Marsh has substantially increased its client base and market size on the continent – before landing a new client.
Michael Duncan, the executive leader of Marsh Africa, said connecting Africa to Marsh’s multinational client base was the aim of its footprint on the continent.
Last year Marsh acquired Alexander Forbes Risk Services’ insurance broking businesses in six African countries, allowing the company to broaden its footprint in South Africa, Namibia, Botswana, Uganda, Malawi and Zambia. It now has its own office network in 13 countries on the continent.
It has established its own offices in some countries and has chosen to work with correspondents and local insurers in others.
Duncan said when clients had small offices, Marsh appointed correspondents to manage their risk, while clients who had larger projects were dealt with directly by industry experts deployed in Marsh’s local offices.
The majority of its clients in Africa are those who belonged to Alexander Forbes Risk Services and the majority of the risks are in mining, oil and gas and infrastructure build programmes.
The company said it had tried to limit the disruptions to the services offered by Alexander Forbes after the acquisition.
“The secret to making sure that you keep all the clients is to retain top people from the company you acquired. The acquisition with Alexander Forbes was very collaborative,” Duncan said.
He said the company handled risk for several hundred multinational clients on the continent, most of whom were from South Africa. But the move to Africa came with its challenges, as the nature of the risks involved differed from those Marsh managed for its global clients elsewhere.
“Our challenge relates mostly to compliance with local insurance regulations,” he said, adding that Marsh was advocating for a regional approach in these regulations.