Marsh’s acquisition of JLT is one of several moves in the insurance brokerage world that will have an impact on the protection and indemnity business this year.
Marsh is likely to consolidate its position as the top marine broker in the P&I and the hull and machinery markets.
It has yet to reveal how it will organise its marine team once the merger has been completed. The only announcement so far is that it will be headed by Marsh’s current head of marine, Marcus Baker. One of the big questions is what role JLT’s head of P&I liability, Mark Cracknell, will play in the new set-up.
Although some observers suggest that a reduction in the number of broking houses will be detrimental to competition, and shipowner interests will be less well served, others believe staff changes from the Marsh-JLT tie-up could result in the establishment of an entirely new broking house.
Different platforms
But it is not only a question of personnel. Both brokerages have very different technology platforms, which they use to get owners the best deal from clubs.
JLT’s rating model provides an independent analysis of P&I premium cost factors to challenge the clubs’ own price models to come up with what it describes as a “fair version of underwriting costs replacing those imposed by the clubs”. It uses the rating tool to negotiate lower premiums for clients.
Marsh’s main P&I technology tool is its P&I Portal, an in-depth database aimed at finding not only the best deal but the most suitable club for owners.
Richard Adler, Marsh’s head of P&I, says: “Deep analysis of the clubs helps us come up with recommendations based on data to find a club that matches the culture of the owner.”
The other main consolidation moves in the P&I market have seen Lockton take a 50% stake in Omni Sigorta following its earlier acquisition of PL Ferrari in 2016.
Just before Christmas, Miller completed the acquisition of Alston Gayler & Co. Both operate in P&I brokerage.
All eyes are now on which brokers will pair up next, with revenue streams under pressure from continued soft rates, particularly in the marine market, and wider market efforts to cut brokers’ commissions.
