Singapore has become the latest country to raise competition concerns over Aon’s proposed acquisition of insurance broking rival Willis Towers Watson.
The Competition and Consumer Commission of Singapore (CCCS) said it had “identified areas for further review” in relation to the proposed transaction.
The city-state’s competition watchdog launched a review of the proposed acquisition in early April and is said to have approached “several third parties” for feedback.
The CCCS said the concerns were related to “consulting services, as a sub-segment under human capital consulting services”.
“Third party feedback suggested that the merged entity will become the largest provider of executive compensation and related consulting services in Singapore post-proposed transaction, and that there are limited alternative providers available who are able to compete effectively in Singapore,” the CCCS said.
“Feedback was also raised by third parties that there may be barriers to entry and expansion, with limited consulting personnel who possess the necessary expertise and experience in providing executive compensation and related consulting services in Singapore.”
Consequently, the CCCS said it “needs to further review the competition effects of the proposed transaction in greater detail”.
In mid-June, US authorities launched legal action to block the $30bn proposed consolidation of what it described as two of the "big three" global insurance brokers.
The US Justice Department filed the civil antitrust lawsuit as it said the merger threatened to “eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services”.
However, both Singapore and the US have not made any reference to the implications for the maritime sector despite both having large marine portfolios.
In March last year, Aon agreed to buy Willis Towers Watson in a deal that was likely to have significant ramifications in the marine insurance market.
A combined entity would create a market leader that would leapfrog Marsh & McLennan, which last year paid $5.7bn for Jardine Lloyd Thompson.
Aon’s global marine team places more than $3bn in marine insurance premiums annually, while Willis Towers Watson has a team of more than 600 marine specialists worldwide. Both are major players in hull, cargo and protection and indemnity insurance broking.
The merged company, which would have 95,000 staff and annual revenue of over $20bn, would operate under the Aon brand and maintain its operating headquarters in London with the parent company based in Dublin.
Both companies’ global marine chief executives — Lee Meyrick for Aon and Ben Abraham for Willis Towers Watson — are based in London.
Willis Towers Watson said it has the largest dedicated P&I broking team in London, handling over 700 separate entries with a premium volume of over $500m per year.
Aon and Willis Towers Watson have yet to comment on the concerns raised by Singapore, but last month said they disagreed with the US Department of Justice's action.
They said it "reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate".
