Arthur J. Gallagher & Co. has announced that it has increased its interest in Capsicum Reinsurance Brokers LLP to 100% from the previous 33%, effective January 1st, 2020.
Grahame Chilton and Rupert Swallow founded Capsicum Re in December 2013 through a strategic partnership with Gallagher. Since then, the firm has grown to become the 5th largest reinsurance broker in the world, with offices in the UK, US, Bermuda, and South America.
The business was established to serve as the reinsurance broking arm for Gallagher, ultimately becoming the main treaty reinsurance outlet of the Gallagher group of companies.
Following the deal, current Chief Executive Officer (CEO) of Capsicum Re, Swallow will continue to lead the firm and will report to Simon Matson, CEO of Gallagher’s UK Broking & Underwriting division. Simon Behagg will continue to serve as Chief Operating Officer (COO) of Capsicum Re, while Chilton has rejoined Gallagher as Chairman of the firm’s global property & casualty broking business, reporting to Tom Gallagher, CEO of the firm’s global property & casualty operation.
J. Patrick Gallagher Jr., Chairman, President and CEO, commented: “We’ve considered Grahame and Rupert to be trusted partners ever since we embarked on our Capsicum Re co-venture six years ago. Given their excellent market reputation and strong track record, we didn’t hesitate to back their business model and their vision for creating a market-leading reinsurance broker. We are delighted to now move forward to the next chapter of Capsicum Re’s story as an integral part of our global brokerage operations and we welcome Grahame back into an active leadership role.”
Swallow added: “I am incredibly proud of all that our Capsicum Re team has achieved in just five full years of trading. 2020 will be another key year of development for us, as we look to expand our US presence while ensuring our clients remain front and centre.
“The US is the largest reinsurance market globally, and being part of Gallagher provides us with access to one of the industry’s largest global brokers and its extensive US network. Gallagher has been beside us through every step of the journey, since our inception, so this deal is the natural evolution of our relationship. It is an exciting time for us; we have great relationships across the Gallagher group and I look forward to working with Simon and his team.”
The deal was first announced in November of last year, when Gallagher revealed that it had agreed and signed heads of terms with Capsicum Reinsurance Brokers LLP.
Chilton said: “When Rupert, Raja and I put the flag in the ground with our partner Gallagher to establish a transactionally focused reinsurance broker that would be dedicated to clients, partners and team members, we believed but many doubted it could be done. Well, six years later with belief, innovation and the hard work of the entire Capsicum Re team we have become a truly trusted advocate of our clients, offering unparalleled levels of service, which — when combined with transactional expertise and bespoke analytics — has seen the delivery of truly creative products.
“The partnership has delivered almost to the dollar the exact financial forecast of the original business plan. None of this could have been achieved without the tremendous support of our customers and the extraordinary support of our partner Gallagher.”
While Matson commented: “The acquisition of Capsicum Re provides the perfect complement to our existing wholesale and retail insurance broking divisions here in the UK. The impressive speed at which the business has grown and established itself over its first five years of trading is testament to the entrepreneurial spirit, depth of experience and innovative approach of its leadership team and sector specialists. We’re very much looking forward to working even more closely with our reinsurance colleagues to the benefit of our respective clients.”