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Marsh & McLennan's Arm Inks Deal to Buy Wortham Insurance

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Global insurance and innovative risk management leader Marsh, a wholly owned subsidiary of Marsh & McLennan Companies (MMC - Free Report) , has announced its agreement to acquire Wortham Insurance, a premier independent insurance brokerage firm in the United States. The transaction is expected to end in the third quarter of 2018. However, value of the acquisition was not disclosed by the company.

Wortham is a Houston-based company with above 530 colleagues in its Austin, Dallas, Houston, Fort Worth and San Antonio offices. The business, founded in 1915, focuses on providing property/casualty insurance, surety, personal lines and employee benefits advice and solutions to a wide variety of businesses and individuals across the United States with particular expertise in energy, power, construction and retail sectors along with managing many specialty programs.

This acquisition will enable Marsh to expand its presence in Texas to include the Austin and Fort Worth markets and would also consolidate its current operations in Houston, Dallas, San Antonio, New Orleans and Tulsa with Wortham. The company also expects to provide market-leading risk and insurance solutions to businesses and individuals. Wortham is well known for its unparallel client relationships as well as deep risk expertise to benefit Marsh. This business would operate under the name of Marsh Wortham.

In February 2018, Marsh & McLennan Agency also purchased Highsmith Insurance, a North Carolina-based independent insurance brokerage firm. With this consolidation, the company expected to add high-quality agencies in the Mid-Atlantic, which has solid management, a good business mix and dedication to provide excellent client service.

Additionally, Mercer, a wholly-owned unit of Marsh & McLennan has bought BFC Asset Management Co., Ltd. (“BFC”), one of Japan’s leading independently owned multi managers, focused on alternative investment strategies in January 2018. The buyout helped Mercer solidify its footprint in Japan and also, in expanding its ability to address the evolving alternative investment needs of Japanese institutional investors.

Acquisitions form one of the core growth strategies at Marsh and McLennan. Since 2009, the company has invested nearly $9.2 billion of capital toward growth and business improvement. These purchases made within its different operating units have enabled it to enter new geographies, expand within the existing ones, foray into new businesses, develop new segments and specialize within the currently running businesses.

Shares of this Zacks Rank #3 (Hold) company have gained 5.12%, underperforming its industry’s growth of 7.62% in the past year.


 

Key Picks

Better-ranked stocks from the insurance sector include Alleghany Corporation (Y - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Aon plc (AON - Free Report) .

Alleghany provides property and casualty reinsurance and insurance products in the United States and around the globe. Sporting a Zacks Rank #1 (Strong Buy), the company pulled off an average positive surprise of 17.61% in three of the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Brown & Brown markets and sells insurance products in the United States, England, Canada, Bermuda and the Cayman Islands. This Zacks Rank #2 (Buy) stock came up with an average trailing four-quarter beat of 9.53%.

Aon offers risk management services, insurance and reinsurance brokerage plus human resource consulting and outsourcing services worldwide. The company holds a Zacks Rank of 2 and managed to pull off an average four-quarter earnings surprise of 2.11%.

 

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