Back to top

Image: Bigstock

Arthur J. Gallagher's Buyout to Shore up Scandinavian Base

Read MoreHide Full Article

Arthur J. Gallagher & Co. (AJG - Free Report) has recently acquired Nordic Försäkring & Riskhantering AB. However, details of the transaction are kept under wraps. The acquisition will help Arthur J. Gallagher widen its Scandinavian footprint.

Gothenburg, Sweden-based Nordic Försäkring & Riskhantering AB was established in 1991. The retail insurance company provides an array of commercial property & casualty insurance services to medium and large organizations. It also provides small business and personal lines solutions to members of affinity groups, professional groups and industry associations across Sweden. 

Post takeover, Nordic Försäkring & Riskhantering AB will continue to operate from its current location under the leadership of Anders Mjaaland, head of Arthur J. Gallagher’s Scandinavian brokerage operations.

Scandinaviais a key area for the insurer’s strategic development and this latest buyout only adds to its previous successful acquisitions.  The insurance broker had bought Norway-based Bergvall Marine AS, the international marine and energy insurance broker as well as  Brim AB in Stockholm to consolidate presence there.

This acquisition enables Arthur Gallagher to leverage Nordic Försäkring & Riskhantering AB’s expertise in fields of life science and traditional Swedish manufacturing industry. It widens the acquirer’s presence in Sweden, boosting trade since Gothenburg is an important trade centre for manufacturing industries. The deal is also inclusive of Nordic Försäkring & Riskhantering AB’s recent buyout of Göteborgs Försäkringsmäklare Per Dahlkvist AB that has niche skill in construction, professional responsibility and occupational transport.

Strategic acquisitions made by the company have always strengthened its portfolio. Seven buyouts have been made by the company in the ongoing quarter.

The Zacks Rank #3 (Hold) insurance broker has put the steam behind its acquisition activity in retail employee benefits as well as wholesale brokerage areas. The pipeline remains strong with revenues worth $250 million.

Share Price Movement

Shares of Arthur J Gallagherhave underperformed the industry over a year. While Arthur J. Gallagher’s shares have gained 15.7%, the industry has registered an increase of 19.4%. Nonetheless, we expect the company’s diversified product offerings, international exposure and strategic acquisitions to drive the shares higher in the near term.



Stocks to Consider

Some better-ranked stocks from the insurance industry are Atlas Financial Holdings, Inc , Markel Corporation (MKL - Free Report) and Mercury General Corporation (MCY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlas Financial Holdings engages in underwriting commercial automobile insurance policies in the United States. The company delivered positive earnings surprises in two of the last four quarters with an average beat of 57.94%

Markel Corporation markets and underwrites specialty insurance products in the United States and internationally. The company delivered positive earnings surprises in two of the last four quarters with an average beat of 21.06%

Mercury General Corporation engages in writing personal automobile insurance in the United States. The company came up with positive earnings surprises in three of the last four quarters with an average beat of 1.06%.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today. Learn more >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Arthur J. Gallagher & Co. (AJG) - free report >>

Markel Corporation (MKL) - free report >>

Mercury General Corporation (MCY) - free report >>