It has not happened yet but the proposed merger of large global insurance brokers Aon and Willis Towers Watson is already being felt at competitor MarshMcLennan.
MarshMcLennan is capitalizing on the marketplace disruption brought about by the pending marriage of the two rivals to add to the pool of talent that it already has.
According to MarshMcLennan President and CEO Dan Glaser, his firm added 500 new employees in the fourth quarter of last year, many of whom were people from Aon and Willis.
“The 500 net headcount increase in the fourth quarter didn’t all come from Aon and Willis, although the majority did,” Glaser told analysts on a call on first quarter results.
Also, MarshMcLennan added more than 100 additional hires from Aon and Willis in the first quarter of this year.
“This is a competitive environment and I do believe working at MarshMcLennan is a choice, not just for companies going through consolidation, but for experts broadly within our industry,” Glaser said.
MarshMcLennan companies, including the world’s largest insurance broker Marsh, have more than 76,000 employees worldwide.
Other companies including Lockton, Howden, Alliant, TigerRisk and Miller have also reported hiring Aon executives.
Aon first announced the offer to acquire Willis in March, 2020 for $30 billion in an all-stock deal, which would be the insurance sector’s largest ever. Aon and Willis are the second and third largest insurance brokers by revenue. If the deal is approved, the combined company, named Aon, will have more than $20 billion in revenue.
The deal remains under review by European Union and Australian antitrust watchdogs.
Reuters has reported that the deal is likely to be approved.
Reuters also reported that EU regulators looking into possible divestments and concessions by the merging brokerages had inquired about certain competitors. A questionnaire asked which nine rivals — French companies Besse, Siaci and Verspieren, German broker Funk, U.S. groups Gallagher and Lockton, and UK rivals Howden, McGill and BGC/Corant — would be a suitable buyer of Willis assets, one of the people told Reuters.
Reuters said the EU antitrust agency typically likes acquiring companies to sell assets to boost a rival, giving customers more choice.
Asked whether MarshMcLennan would be in a position to step in as a buyer of Aon or Willis assets, Glaser said it is unlikely.
“I think the general idea of divestment would be to satisfy regulator’s concerns about having enough competitors in the marketplace. So it would be unusual for them to look to us as a possible answer,” he said. “We’re open to all ideas, but ultimately, I think it’s unlikely that we would be a participant.”
At the same time, he said, MarshMcLennan has a “very rich pipeline of companies” that it is having discussions with so he feels very good about his firm’s ability to continue to add to its strength.
Aon has already agreed to some concessions including selling assets in five European Union countries and the Willis reinsurance business and Willis’ insurance broking activities in France, Germany, Spain and the Netherlands, Reuters reported.
Aon and Willis had hoped to close on the deal in the second quarter but EU regulators have said they will not issue a decision until July 27.
Last July, Glaser was asked about the potential benefits to MarshMcLennan of the deal.
The pending acquisition is “not good for the market or for clients but is good for Marsh & McLennan,” he said, adding that he thought it does give MarshMcLennan opportunities in the competition for professional talent. “The big three becomes the big two. How could that not be a benefit to us?” he said.
Glaser said he was speaking “personally” as someone who has been in the business for 40 years.
*This story ran previously in our sister publication Insurance Journal.