Insuramore Analysis on the Aon-NFP Deal

The acquisition deal announced by Aon earlier this month was a huge one. In case you are still desk-bound today, here’s some comment and analysis from Insuramore;

Analysis from Insuramore indicates that Aon’s acquisition of NFP, announced on 20th December 2023, will have a significant effect on the structure of the insurance broking sector. According to its global rankings of insurance broking and MGA / MGU groups, which were last updated earlier in 2023 with data for 2022, NFP is a notable competitor across all broking segments with a worldwide ranking as high as seventh for employee benefits activity plus life and health insurance retail broking, 12th for reinsurance broking, 18th for commercial P&C retail broking, 35th for private P&C retail broking, and 14th across all forms of broking combined.

As such, using the data collected for 2022, the acquisition of NFP has the following impacts on Aon’s positioning in the insurance broking sector:

• for total broking activity, its global market share would move up from 7.6% to 8.8% and it would remain in second place behind Marsh McLennan;

• for commercial P&C retail broking business, its global market share would advance from 8.9% to 9.7% and it would also remain in second place behind Marsh McLennan in this field;

• for private P&C retail broking business, its global market share would surge from 1.0% to 1.7% and it would rise from 22nd to ninth position in a comparatively fragmented segment;

• for employee benefits activity plus life and health insurance retail broking, its global market share would increase from 6.4% to 8.5% and it would remain in third place behind WTW and Marsh McLennan;

• for reinsurance broking business, it would continue to be ranked first worldwide with a global market share edging up from an already dominant 30.8% to 31.8%.

As for wholesale broking and MGA / MGU / cover-holder activity, these are segments in which both Aon and NFP appeared lower down the worldwide rankings in 2022. However, the combination of the two organizations would see them rise to a ranking of around 15th in the former segment with a global market share of 1.5% and to a ranking of around tenth in the latter segment with a global market share of approximately 1.7%.

Overall, these movements show how the transaction promises to reinforce Aon’s position in its core markets and to bolster it in markets in which it is less influential as part of the largest deal ever announced in the global insurance broking sector (at well over twice the value of Marsh McLennan’s acquisition of Jardine Lloyd Thompson in 2018/19 and not counting the aborted merger of Aon with WTW). Indeed, in its core segments, the deal will keep Aon comfortably ahead of a chasing pack of fast-growing competitors which include Acrisure, Alliant, Gallagher, HUB and Lockton, among many others.