Specialist re/insurance broker Miller’s recent acquisition by private equity firm Cinven and Singapore’s sovereign wealth fund GIC will fuel multiple growth opportunities, Miller’s chief executive officer Greg Collins and executive chairman Ken MacDonald told Intelligent Insurer in a Re/insurance Lounge interview.
Collins predicted expansion, organic growth and possibly mergers and acquisitions (M&A), along with an increased presence in Bermuda.
“This is definitely a growth story,” he said. “We believe there are enormous possibilities across the market for us to grow both organically and inorganically, so we will be targeting acquisitions where we think there is a strong cultural fit and where that builds on our existing specialty platform in the insurance and reinsurance spaces.
“We’re not looking to be generalists, we want to remain true to our core and focus on our specialty lines of business, so that means the M&A focus will be very much around enhancing our existing specialty lines or taking us into lines of business we might not otherwise be strong in at the moment.
“We will then be looking to increase our amount of hiring, bringing in individuals and teams from around the business.”
The initial focus will be very much on London, he added, but Miller also has a keen focus on Bermuda and, given GIC’s backing, the company is very aware of the opportunities that the acquisition brings in Asia.
On the topic of Bermuda, MacDonald noted that Miller has been trading on the Island for many decades but with a “fly in-fly out” approach. However, Miller’s 2018 acquisition of London marine and reinsurance broker Alston Gayler and Co (AG) gave it a heightened awareness of the possibilities on the Island.
“When we made the AG acquisition we could see the opportunities that were arising from their activities, and as we blended their relationships with some of the Miller relationships we could truly see the opportunities,” MacDonald said.
“That’s what led us to feeling we need to have a more permanent base on the Island, and the key thing for us is to focus continually on the specialty space—the cat areas, retro, the insurance-linked securities marketplace for example, which is still growing actively in Bermuda. You definitely miss opportunities by not being there, and that is a key part of our objective moving forward.
“We’re in the advanced stages of reactivating our presence on the Island. I say ‘reactivate’ because we have a broking subsidiary there but it’s been dormant for five years, so we are rebooting that and looking to build a reasonably substantial presence on the Island over the next 12 to 18 months. The focus for us on the Island is the retro space.”
Miller also wants to build on some of the other aspects of the reinsurance market in which it is already active, including the D&F space, and it will have the US wholesale capability for some of its North American clients.
“We’re on an accelerated growth curve on reinsurance, we’re in the market, we’re looking at talent and we’re feeling very good about our plans at the moment,” MacDonald said.
“We need to have a more permanent base on the Island, and the key thing for us is to focus continually on the specialty space.”
Ken MacDonald, Miller
Long-term views
Explaining the appeal of the acquisition by Cinven and GIC, Collins said it was important for Miller to identify investors who were prepared to invest for the long term.
“The fund through which they are investing is a long-term fund so the horizon gives us plenty of time to grow without having to accelerate for the sake of it,” he said.
“The cultural fit was very good, we liked the people we were dealing with at both firms and we feel we can work very well together. Probably most important, they engaged with our vision for the business and the pace at which we wanted to grow. We think they will be great partners for those reasons.”
Miller had an investment from Willis Towers Watson (WTW) in 2015: WTW owned 85 percent of the business and Miller’s partners owned 15 percent. The structure of the new deal is that GIC and Cinven are 50:50 co-investors in a fund that will acquire 100 percent of the interest in Miller as a partnership, buying out both WTW and the partners. The current partners of Miller will be reinvesting back into the new business.
“It means we have a structure in place that allows us to incentivise existing partners to help grow the business and gives us a currency to bring in new people as well,” said Collins.
Explaining WTW’s departure, he added: “We’ve had a very reliable shareholder in WTW for the past five years but it became clear to us and to them that as time went by our strategies were diverging, and the recent Aon transaction has accelerated that difference.
“For us this is about regaining true independence and for our staff this allows us to create incentives we wouldn’t otherwise have the ability to do. It’s good for clients, and for the staff as well.”
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