JLT to Merge With Lloyd & Partners, Pursue U.S. Specialty Expansion

August 29, 2014

Jardine Lloyd Thompson Group plc (JLT) caught merger fever again. The provider of insurance, reinsurance and employ benefits-related advice and services said it would merge one of its divisions with Lloyd & Partners.

Financial details of the cash and debt deal are not being disclosed. But plans call for Lloyd & Partners to be merged into JLT Specialty, to create a larger London Market specialty business. JLT offers insurance and advisory products to U.K. and international retail clients, including construction, aviation and financial lines coverage. Lloyd & Partners, meanwhile is wholesale broker for JLT Group, and it helps independent brokers gain access to London, European and Bermuda markets on behalf of their corporate clients, in coverage areas including energy, cargo and healthcare.

The move follows JLT’s $250 million acquisition of Towers Watson’s reinsurance brokerage business last year. The Towers Watson reinsurance business was merged into JLT’s reinsurance business, JLT Re, and is now known as JLT Towers Re. That merger alone created a new entity with combined revenues of $266 million, plus 700 employees in 35 locations in 17 countries.

By merging Lloyd & Partners into JLT Specialty, the idea is to build the capacity for a larger international reach and blend each company’s specialty teams into a larger, more efficient operation. Both sides said there is very little overlap between the two businesses.

Once the deal closes (hopefully by the end of 2014), Lloyd & Partners CEO John Lloyd will become CEO of JLT Specialty. Adrien Girling, current chairman of JLT Specialty, will become chairman of Lloyd & Partners. While the combined business will trade as JLT Specialty, the Lloyd & Partners brand will still be part of the equation – part of JLT Group’s plans to serve and develop its independent wholesale client base, the companies said in the deal release.

In a related move, JLT said it will expand its U.S. specialty capabilities in the wake of the new merger, into areas including energy, construction, financial lines, credit, political & security and aerospace (where JLT already maintains a U.S. presence).

JLT said it is pursuing U.S. expansion as part of a global growth push.

“The expansion of JLT’s U.S. specialty capability builds on the success we have had over recent years and is the next natural step in our evolution,” JLT Group CEO Dominic Burke said in a statement. He added that merging JLT Specialty and Lloyd & Partners “creates a real powerhouse in the market in our chosen specialty areas under John Lloyd’s proven leadership.”

Assuming the JLT Specialty/Lloyd & Partners deal goes through, plans are also in place to appoint Mark Drummond Brady as deputy Group CEO, Mike Reynolds (the current Group Finance director) as global CEO of JLT Towers Re, and name Martin Hiller as CEO of JLT EMEA, with responsibilities for JLT Group’s MGA activities and Thistle Insurance Services.

Having played an instrumental role in the development of JLT’s global reinsurance capabilities and in the acquisition of Towers Watson Re, Alastair Speare-Cole has decided to leave the organization at the end of the year to pursue other interests.

Source: JLT Group