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Willis Re to Buy SurePoint for A&H Insurance Business Growth - Analyst Blog

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Willis Re Inc., the North American reinsurance business of Willis Group Holdings plc ( WSH ), inked a deal to buy SurePoint Reinsurance Advisors, LLC. The company's efforts to ramp up its accident and health (A&H) insurance business added momentum to the share price that gained 0.6% to close at $42.60. Though the terms remain undisclosed, the transaction is expected to materialize in the late third or early fourth quarter of 2014.

SurePoint Reinsurance Advisors is a professional advisory and reinsurance broking firm providing specialized services to insurance companies in the employee benefit market, in particular the A&H sector. Adding SurePoint to Willis' portfolio will boost the existing capabilities in the growing A&H market in North America.

Over a decade, SurePoint has been deploying its capabilities to cater to its clients' financial objectives. SurePoint's Group Life, Disability and voluntary business capabilities when combined with Willis Re's medical and catastrophe expertise will create enhanced and innovative product and services. In addition, the SurePoint acquisition will widen WIllis' scope and breadth of offerings.

Willis has always undertaken strategic acquisitions that drive its operational results. Last month, Willis Ireland acquired a range of Irish pension and financial advisory businesses from IFG Group plc. The buyout will solidify Willis Ireland's present pensions business apart from strengthening its operational performance and commitment to improve wealth-planning services.

The takeover will also add top industry platforms and technology for defined contribution pensions to Willis Ireland's portfolio. The acquisition will also help Willis Group to solidify its global Human Capital and Benefits practice and ramp up its inorganic growth profile. With the same objective, Willis Group agreed in May, to the takeover of a 75% equity interest in Max Matthiessen for $205 million.

Willis Group witnessed downward estimate revisions after posting dismal second-quarter earnings that missed the Zacks Consensus Estimates and deteriorated year over year due to higher expenses. The Zacks Consensus Estimate for 2014 moved down 4.5% to $2.53 and 4.7% to $2.81 over the last 60 days. With optimism over its compelling inorganic growth we expect the analysts to pull up their estimates, exerting upward pressure on the Zacks Rank. Willis Group presently carries a Zacks Rank #5 (Strong Sell).

As insurance brokers choose the inorganic route for growth, the takeover saga rages the space. Last week, Arthur J. Gallagher & Co. ( AJG ) bought Australia-based Parmia Pty Ltd. to widen its Australian presence. Marsh Inc., the insurance brokerage wing of Marsh & McLennan Companies Inc. ( MMC ), acquired Montreal-based commercial insurance brokerage, Kocisko Insurance Brokers Inc. earlier this month. Last month, Aon plc's ( AON ) global risk management business, Aon Risk Solutions, acquired a Lima, Peru-based risk and insurance solutions provider, Grana y Asociados.

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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.


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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