Gallagher expands insurance market presence here with purchase of First Ireland

US insurance broker Gallagher has bought another firm in the fast-consolidating insurance broker market, adding First Ireland Risk Management to its growing stable in Ireland.

he deal for the Dublin-based firm, which writes both commercial and personal lines of business, further expands Gallagher’s presence following the purchase of Innovu and Doyle Mahon last year.

Gallagher said it will become one of the largest insurance brokers in Ireland after the acquisition closes.

The New York-listed insurance giant said it is continuing to look for new brokers businesses to buy as it integrates the three purchases it has made in the last seven months.

“This represents a significant step forward for Gallagher in Ireland,” said Ronan Foley, CEO of Gallagher in Ireland.

“It provides us with a strategic presence in Dublin from which we will continue to expand our nationwide footprint. First Ireland is a business we have always admired and its specialist expertise will strengthen our overall offering.”

The transaction will add 120 employees to Gallagher’s network in Ireland, bringing total headcount to 275.

First Ireland has a client base of over 35,000 customers split between 70pc commercial and 30pc personal lines.

The First Ireland team will become a part of Gallagher’s UK and Ireland retail division. The joint managing directors of the firm, Tony Gill and Linda Gallagher, will be staying with the firm and reporting to Mr Foley.

Mr Foley founded Innovu in 2018 and, with the help of private equity firm MML Growth Partners, bought Sheridan Insurances, one of the largest broker groups in the north-east.

The company quickly built scale through a series of further acquisitions of regional brokers, including Wexford Insurances, Goggin Insurance Brokers, Cullen Insurances and PE Kelly Insurances.

The deal for Innovu gave Gallagher a firm foothold in Ireland, with 135 employees and a customer base of 45,000.

The company had revenue of €7.9m in 2020, the most recent year for which accounts are available.

That launch pad has already proved valuable to Gallagher as it competes for assets in a fragmented market that is experiencing significant mergers and acquisitions activity

Smaller firms have been driven in recent years to seek deep-pocketed buyers due to increased costs and regulatory demands, while rich valuations have been hard to turn down.

The First Ireland deal is just the latest in a series of regular transactions in the sector as buyers hunt down firms with good income profiles and strong local customer relationships.

Aston Lark Ireland, which is owned by UK giant Howden, has made more than a dozen bolt-on acquisitions in less than a year and a half, the two most recent being Gateway and Sparrow.

Irish group Arachas, another owned by large UK independent Ardonagh, bought Glennon Insurances in July, part of an aggressive buying spree extending back to 2017.

Other big deals in the last year include sales of Quote Devil, Chill Insurance and Gallivan Murphy, both for €100m, in transactions that involved big pay-outs for their owners.