UK Insurance Mergers & Acquisitions: Could HSBC sale see Marsh and Aon on par again in 2010?
As 2010 warms up Insurance Blog has let resident Insurance journalist Kris Oldland give his UK Insurance insiders view as he plays Nostradamus with HSBC Insurance Brokers.....
In a year that has seen considerably less Insurance Mergers & Acquisitions activity than we had become accustomed to in the latter half of the noughties, the UK Insurance press at large has seemed occasionally a little desperate for gossip. So when one company keeps returning to the forefront of the latest trade press pages we can’t be blamed for thinking that we may have heard it all before…
However there is a certain persistence in the continuing rumors that Marsh are intent on purchasing HSBC Insurance Brokers to make me think that there could be just the tiniest hint of truth behind all this.
Of course from a strategic point of view it would make absolute sense for Marsh to make a bid also.
The market speculation is that Marsh has offered to buy the bank’s broking arm, HSBC Insurance Brokers. The inference that is being made in somewhat hushed tones however, is that this is all just part of a wider strategy by Marsh to get the banking giants on side. The long-term aim it is suggested is then to broker an affinity deal with the bank.
To date both companies have refused to comment on the speculation despite the rumor being reasonably widespread for some time now.
What is clear though is that a decision of HSBC to sell the division would fit in with plans for a wide reaching shake up of its insurance operations. In the previous financial year the bank disposed of its insurance operations based in Malta, Guernsey and Bermuda. The latter being perhaps the most telling move of all that the bank sees insurance as becoming non-core to their overall strategies.
Then as if further re-enforcing this position HSBC Insurance made the announcement that it was to cease underwriting motor insurance completely, swiftly putting HSBC Insurance (UK), its UK motor insurance vehicle into run-off.
It was at this time - when HSBC made the announcement that the corporate strategy was now to be focusing on pensions, investments business and life insurance and moving away from (motor) underwriting in the UK, that tongues really started to wag regarding the other insurance elements.
Various suitors have been referred to in the insurance press ever since, however for me, the fact that through this one acquisition Marsh could make a serious dent in the gap between themselves and their largest and oldest rival, super broker Aon (who of course pulled a similar trick last year when they bought Benfield) would suggest there is more than idle gossip involved here.
Based on the figures produced by IMAS corporate advisors earlier this quarter, the gap between these two giants of the broking sector is currently at £214m. HSBC Insurance Brokers are currently ranked ninth in the UK and should there revenue of £146m come under Marsh control then the gap between Aon and Marsh would come down to a rather more competitive £68m. What this would mean for the rest of the UK Insurance Brokers market is a topic for another article entirely though!
So for Marsh the attraction of picking up HSBC Insurance Brokers, especially from a parent company who appear keen to exit this sector, could be a little to tempting to resist? Well add into this mix the fact that the current CEO of HSBC Insurance Brokers, Phillip Gregory is an ex Marsh man. (CEO Europe, Middle East and Africa)
So with a tailored made CEO to oil the process of transition, should the question perhaps be when rather than if this deal is going to go through?
Well I’m not one to gossip but….
Interesting analysis Kris!
We'll keep you posted here of any developments.
Labels: acquisitions, HSBC, Insurance Brokers, Insurance Business for sale, Insurance Mergers and Acquisitions, Marsh, mergers
Credit Card Companies - Don't you just love them?
Online businesses are at Serious risk from Banks and Credit Card companiesOn the day that CIFAS, the UK’s fraud prevention service announced that the number of cases of identity fraud in the UK in the first quarter of 2009 was up 40% on last year, Insurance Blogger has been taking issue with HSBC Business Credit Cards on this very issue, and I've got to warn you HSBC people - Insurance Blogger is FURIOUS!!
So think on this.....
I arrived at work this morning to see an email in my inbox from Experian - the UK's credit reference agency - informing me that my credit check account had been stopped because my HSBC Business card had been declined!
Now that is seriously bad news, having your credit card refused while trying to buy services to check credit!So a puzzled Insurance Blogger phones the HSBC Busines Cards helpline located in downtown Banglahore or somewhere where it is midnight, to find out what is happening only to be told the following, horrifying news......
That my business credit card has been cancelled!
What!
" Sir, your credit card has been cancelled as it's number appears on a list of cards at risk of potential cloning, identified by the Intelligence team (sic) in our HSBC fraud department. We tried to telephone you two weeks ago to tell you that we were cancelling the card!"
WHAT? Are you telling me that you've been cancelling all my online transactions because you suspect my card has the potentiality to be used for fraud? And you haven't even bothered to put it in writing to us?
There then followed a very heated discussion where I was passed around different departments in the Asian call centre, where I tried to explan that we are an online company and as they can see very clearly from our statements, that there are many suppliers who take money ad hoc on a daily basis, in particular website hosting and intellectual property, and if these people aren't paid our business is at serious risk and ........we are going to hold you HSBC personally responsible for any business losses we suffer........
To make matters worse it turns out that the HSBC business credit card system cannot issue a new card for three to five days after the old one has been finally purged from the system.
I asked them, apart from creating days of work for us going through and changing credit card numbers on countless online accounts, what they were going to do to honour any payments that might get taken out, during the period where one card is cancelled and the other has not arrived?
I pointed out that all businesses need continuity - but the poor girl didn't really understand...
So this matter is still up in the air and our successful online business put in jeopardy by HSBC worried about something that might not happen and would be very easy to correct anyway -
Why is there online credit card fraud anyway? - Money doesn't just dissappear into thin air!
There is always a papertrail!HSBC you have seriously lost the plot and we can't be the only UK company that you have done this to.
How many cards on are on your stupid list?
You are seriously affecting online business and not helping in the fight to stop online fraud.
What was that stupid movie where crime was detected before it actually happened ?- GET REAL HSBC!
I'm currently drafting a motion for our company general meeting to change business banks - the problem is where do you go? All the British Banks are totally out of touch of the needs of the modern UK small business!
And as for the OUTRAGEOUS interest charges that these banks are ALLOWED to charge for the credit card service........enough said!!!!
Hey Mr Brown,
Do something about these credit card companies and Interest rates and you might even stand a dogs chance of getting re-elected!
Labels: card fraud, credit cards, HSBC, identity theft
HSBC gets into Insurance Affiliate marketing
We have personal and company bank accounts with HSBC for many years, and have been subject on the personal side to decreasing customer service the further it gets away from Midland in time.
We choose to stay with them purely out of apathy and dread of the bureaucracy that changing company stuff entails.
The fact that we were aware that the banks position wasn't threatened by the the collapse of the British Financial casualties in hindsight seems irrelevent.
Anyway HSBC are won of the only new entrants into the Insurance affiliate marketing circle during these times when some very big players are withdrawing from the scene.
My company these days is in a fortunate position to pick and choose who we wish to promote and , for all those evening calls from far away call centres moaning when I've gone a few quid over my overdraft limit, aside from the fact that my companies put millions of pounds through their system over the last 15 years - it gives me great pleasure to announe that I will not be promoting their insurance products!
Labels: HSBC
