When the market shifts, nimble
wholesalers are poised to take advantage of the
“It’s obvious that somebody thinks this market
is going to change.”
Words chosen by one wholesaler who, in a recent discussion
with yours truly, mused on the consolidation activity that has
pervaded the wholesaler segment this year. There’s no
doubt things are in motion. And as wholesalers restructure and
re-tool through a wave of M&A activity, it begs the
I spoke with some of the players to get their take on why
they put in motion changes that have dominated wholesaler
headlines in recent months.
“There is motivation to sell in a tough
marketplace,” says Ben Beazley, who now serves as
co-president of R-T Specialty’s Los Angeles office and
director of the organization’s Property Practice Group.
R-T Specialty is the wholesale brokerage unit of Ryan Specialty
Group, started by Aon founder Patrick G. Ryan in February. In
July, R-T Specialty acquired Chartwell Independent Insurance
Brokers, which Beazley started in 2004.
Based in Southern California, Chartwell quickly expanded
operations into other states, specializing in hard-to-place
property risks. “About 80% of our business was
property,” he says.
To stay competitive at a higher level, he says, the
wholesaler needed to provide more in-depth services such as
risk modeling, developing forms and better market access.
That’s when he started looking.
When asked if he had any anxiety about partnering with a
startup wholesaler, Beazley’s response was a quick and
“The ‘newness’ of R-T Specialty
didn’t bother me at all,” he says. In fact, it was
he who initiated the discussion. “When Pat Ryan got into
the MGA/MGU arena, I saw someone with an incredible track
record. The same is true of [R-T president and CEO] Tim Turner.
The MGA/MGU model will help capture more middle-market
business, and our experience in property will help with the
management of larger accounts.”
“The real synergy is that we believe we have the
strongest casualty team in Southern California but are weak in
property,” Turner said. “They [Chartwell] are
strong in property. It was a perfect opportunity.”
Beazley says he was skeptical about doing business with a
bank or venture capitalist-backed wholesaler. He believes R-T
Specialty’s independence makes it attractive to many of
Also attractive to retailers are a wholesaler’s
overseas capabilities, says J. Neal Abernathy, president and
CEO of Swett & Crawford. The wholesaler made headlines this
summer as a component of the newly formed Cooper Gay Swett
& Crawford, now claiming to be the world’s largest
global wholesale and reinsurance brokerage. He says both
organizations had been searching for international capability
for some time.
“While other mergers are driven by financials, ours
was not. This merger was something we’ve wanted to do for
nearly five years,” he says. Abernathy spent much of
those years reviewing possible relationships in London and
learning that many of them already had significant presence in
the U.S. With Cooper Gay, there was virtually no overlap. They
had very limited relationships in the U.S., he says.
“We’ve always been U.S.-based. It was time for us
to better serve our retailers with more overseas