Arthur J. Gallagher (AJG) Unit Acquires Horseshoe Insurance

Arthur J. Gallagher & Co.’s AJG subsidiary, Artex Risk Solutions, recently concluded the acquisition of Horseshoe Insurance Services Holdings Ltd, a Bermudian insurance manager and ILS fund administrator.

Established in 2005 and based in Hamilton, Bermuda, Horseshoe Insurance Services is an independent company and provides insurance management, fund administration, advisory and corporate services to the insurance-linked securities (ILS) market. With offices in London, Cayman, Sri Lanka and Charlotte, NC, the company also offers tailor-made, integrated technology solutions.

The buyout of Horseshoe Insurance Services will not only strengthen the ILS operations of Arthur J. Gallagher but also help consolidate its position as the one of the best service providers to the world’s risk capital.

With this acquisition, Horseshoe will be part of Artex’s global brand in the ILS market, and operate as one global team across multiple jurisdictions. This will aid in providing better service to clients and enhance delivery of services.

Artex is a solutions company and is a provider a full range of alternative risk management solutions. It empowers clients and broker partners to take decisions regarding risk management.

Arthur J. Gallagher has grown meaningfully over the years through a number of strategic acquisitions that drove growth, strengthened presence, enhanced capabilities and diversified operations. The company’s revenues are geographically diversified with strong domestic and international operations. It derives about one-third of revenues from international operations.

Given the insurance industry’s high capital level, companies are aggressively pursuing mergers and acquisitions. Arthur J. Gallagher’s inorganic pipeline remains strong with of revenues about $400 million. In the first nine months of 2019, the company has completed 38 acquisitions. The company targets about $1.5 billion of mergers and acquisitions with free cash and debt.

Shares of this Zacks Rank #3 (Hold) insurance broker have gained 39.1% in the past two years, outperforming the industry’s rally of 31.7%. The company’s policy of ramping up growth and capital position should continue to drive share price higher.

Stocks to Consider

Some better-ranked life insurance stocks include EverQuote Incorporation EVER, Kemper Corporation KMPR and MGIC Investment Corporation MTG, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EverQuote Incorporation’s online marketplace offers consumers shopping for auto, home, and life insurance quotes.  The company came up with average four-quarter positive surprise of 84.25%.

Kemper Corporation provides property and casualty, and life and health insurance to individuals and businesses in the United States.  The company has an average four-quarter positive surprise of 16.40%.

MGIC Investment Corporation provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States. The company pulled off an average four-quarter positive surprise of 12.63%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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