Arachas, the largest Irish insurance broker, has agreed to buy third-generation family-owned Glennon Insurances in Dublin as consolidation in the broker market continues at pace. Industry sources put the value of the deal at more than €90 million.
Glennon Insurances, which has been in operation for 75 years, has commercial clients across the construction, medical, retail, professional services, real estate and professional affinity group sectors as well as a business in private home and motor insurance. It is currently placing about €80 million of gross written premiums with insurers annually.
The company, chaired by David Glennon, grandson of the firm’s founder, has more than 100 employees. The deal, subject to regulatory approval, will grow Arachas’s headcount in Ireland to more than 600. A spokesman for Arachas declined to comment on the value of the deal.
“With many potential buyers approaching us, Arachas stood out as a partner who shares our family business values and our approach to listening to our clients so that we can find the best way to protect what matters most to them,” said John Bissett, chief executive of Glennon Insurances.
Arachas, one of the most active dealmakers in the industry in the Republic, was itself acquired in 2020 by Ardonagh, a UK brokerage group that is backed by US private equity firms Madison Dearborn and HPS Partners, for €250 million. Arachas is led by chief executive Connor Brennan.
At the time of the Ardonagh purchase, Arachas had set its sights of doubling within five years the €270 million of annual gross premiums it was writing for everything from plumbers to sporting organisations. The Glennon transaction, coupled with last year’s purchase of Waterford-based Hooper Dolan has helped Arachas to achieve that target ahead of schedule.
The deal comes less than two months after global insurance giant Arthur J Gallagher announced its arrival in the Irish market with the acquisition of MML Capital Partners-backed insurance group Innovu.
Elsewhere, PIB Group, a UK intermediary that entered the Irish market in 2017 and went on to buy Campion Insurance last year, moved in May to buy Limerick-based Sullivan Insurances.
The wider Irish market has seen a flurry of broker deals in the past six years as it followed waves of consolidation in the UK and North America. The ultimate backers of most of the purchasing vehicles are private equity firms, attracted to a sector that is fee-based and delivers steady revenues through the economic cycle. This allows buyers to service the debt needed to finance further deals.
A Central Bank of Ireland report published in May on employers’ and public liability and commercial property insurance showed that broker commissions across these three lines of coverage – usually sold as a package – equated to 16 per cent of insurance underwriters’ gross earned premiums in 2019 and 2020.