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Arthur J. Gallagher Acquires Full Ownership of Capsicum Re

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Arthur J. Gallagher & Co. AJG has increased investment in Capsicum Reinsurance Brokers LLP to 100% ownership, effective Jan 1, 2020. The other details of the transaction were kept under wraps.

Arthur J. Gallagher earlier owned a 33.3% partnership interest in Capsicum Re LLP. It is the parent entity of Capsicum Re.

Capsicum Re is a full-service global reinsurance broker. It was founded in December 2013 by Grahame Chilton and Rupert Swallow through a strategic partnership with Gallagher. With offices in the UK, the United States, Bermuda and South America and over 150 employees, the company has grown to become the fifth largest reinsurance broker in the world. It specializes in providing customer-centric solutions across the globe in all reinsurance classes. The company challenges the larger global reinsurance brokers by combining the best advocates in the industry with market-leading analytical capabilities.

With this investment, Arthur J. Gallagher will be able to move forward with Capsicum Re as an integral part of its global brokerage operations. Capsicum Re’s excellent market reputation and strong track record will enable Gallagher to be a market-leading reinsurance broker.

Notably, this deal will enable Capsicum Re to expand presence in the United States, which is the largest reinsurance market globally. Moreover, being part of Gallagher, it will get access to one of the industry’s largest global brokers and its extensive U.S. network.

Shares of Arthur J. Gallagher, which carries a Zacks Rank #3 (Hold), have gained 49.3% in the past two years, outperforming the industry’s growth of 42.1%. The company’s policy of ramping up growth and capital position should continue to drive share price.

Stocks to Consider

Some better-ranked stocks from the same space are Fanhua Incorporation FANH, Aon plc (AON - Free Report) and Brown & Brown BRO. While Fanhua sports a Zacks Rank #1 (Strong Buy), Aon plc and Brown & Brown carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fanhua distributes insurance products and provides property and casualty insurance, life insurance and participating insurance products in China. The company topped the Zacks Consensus Estimate in three of the last four reported quarters, the beat being 13.44%, on average.

Aon offers advisory and solutions based on risk, retirement, and health to clients and provides commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captive insurance provider.  The company beat the Zacks Consensus Estimate in three of the last four reported quarters, the surprise being 0.57%, on average.

Brown & Brown markets and sells insurance products and services in the United States, England, Canada, Bermuda, and the Cayman Islands. The company surpassed the Zacks Consensus Estimate in three of the last four reported quarters, the beat being 6.12%, on average.

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