WTW, a prominent broking group, has announced its return to the treaty reinsurance broking sector through a joint venture with Bain Capital, a specialist private investment firm. This move comes after WTW exited the treaty reinsurance market in 2021 when it sold parts of its reinsurance broking business, including Willis Re, to AJG.
The re-entry into the market has been anticipated for some time, and WTW confirmed this development during an investor presentation. In the new joint venture, WTW will hold a minority stake, partnering with Bain Capital, which has a strong interest in reinsurance-linked opportunities.
The joint venture aims to merge WTW’s extensive experience, global network, and expertise in insurance broking with Bain Capital’s team of insurance industry specialists. WTW emphasized that this collaboration will leverage its resources, analytical capabilities, and brand strength, while minimizing execution risks due to Bain Capital's established reputation.
WTW is optimistic about the venture's potential, expecting it to operate with an attractive margin profile and contribute positively to its business mix. The company sees significant growth opportunities as the joint venture scales up.
In addition to its reinsurance focus, WTW previously divested its insurance-linked securities (ILS) and capital markets division to Gallagher in 2021. It remains to be seen if the new venture will also explore re-entering the ILS market, providing structuring and capital advisory services for clients seeking alternative reinsurance capital.
The reinsurance sector increasingly demands brokers to have ILS capabilities, making it essential for WTW to consider this aspect. However, gaining traction in this segment can be challenging without attracting senior talent from competitors.
Hiring will be a critical focus for WTW as it develops its reinsurance treaty capabilities within the new joint venture. There have been ongoing rumors about senior professionals and entire teams potentially joining the new WTW Re broking startup, and it will be interesting to see if these speculations materialize.
For more insights, WTW encourages interested parties to view their Artemis Live video interviews and subscribe to their podcast, which covers topics related to insurance-linked securities, catastrophe bonds, and reinsurance. The podcast is available on various platforms, including Apple, Google, and Spotify.
