Truist
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It acquired wholesaler ARC Excess & Surplus, confirming an earlier report from this publication. -
Insurance Insider US spoke with the incoming CEO to discuss the future of TIH.
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The mid-market unit has been a home run but will now face the fresh test of integrating a $1.3bn revenue business.
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With the disposal, TIH would amass a robust war chest for a looming MGA consolidation arms race.
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Sources said that the business will be marketed off adjusted Ebitda of ~$500mn, including a title broking asset.
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The broker has seen an “outpouring of interest” from talent looking to join since the Truist exit.
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State National has been lined up to front for the vehicle, which would be a rare example of third-party capital in this space.
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The firm will no longer have to compete with one hand tied behind its back.
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The $15.5bn price tag equates to around 18x the company’s 2023 core Ebitda.
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The Insurance Insider US news team runs you through the earnings results for the day.
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The oversubscription may signal additional capacity waiting on the sidelines.
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The announcement confirms earlier reports from this publication.
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Sources said the deal was roughly three times over-subscribed as cat becomes hot.
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He will assume the role of office president in mid-2025.
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Sources said Stone Point and CD&R will each have stakes of around 35%.
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The firm will have more flexibility around talent compensation and M&A activity.
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TIH CEO John Howard said the deal positions TIH for continued growth.
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Work is underway to line up a supporting debt raise that could be ~$7bn.
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The executives were speaking after Truist reported Q4 organic growth of 7.3%, accelerating from 6.3% in Q3 and 5.6% in Q4 a year earlier.
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The bank’s representatives have started reaching out to other potential interested parties.
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He most recently served as the Truist-owned broker’s national director of P&C.
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The broking firm promoted Rachael Yelverton to director of strategic projects while Jeremy McCaslin was named chief innovation officer.
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Truist appointed Neil Kessler to lead the wholesale division as CEO, while Bill Goldstein will become CEO of the underwriting unit.
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The Inside P&C news team runs you through the earnings results for the day.
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The executive declined to comment on Truist Insurance sale reports but said the firm is constantly assessing all its options.
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Inside P&C has independently confirmed that the bank is working on a full sale of its insurance operation amid a challenging banking environment.
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The private equity house already owns 20% of Truist’s insurance business following a deal earlier this year.
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Inside P&C’s news team runs you through the key highlights of the week.
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In a recent report titled “TFC: Primed for activist”, Wells Fargo notes investor discontent and lists pressing issues to be addressed at Truist.
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The firm’s interim CEO Ami Barlev has argued that, with Vesttoo’s weekly expenses being $360,000, freezing assets above $1m would be “catastrophic for the company”.
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The Inside P&C news team runs you through the earnings results for the day.
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John Howard, CEO and chairman of Truist Insurance Holdings, noted that the response to its minority sale to Stone Point had been “very positive”.
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Organic growth fell 90 basis points from 5.6% in Q4 2022 due to carrier capacity constraints and slower growth in wholesale.
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The sale represents an aggregate value of $14.75bn and increases Truist's common equity Tier 1 ratio by approximately 30 basis points.
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Inside P&C’s news team runs you through the key highlights of the week.
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Management of the insurance broking business should seek to seize the opportunities of independence with both hands.
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The Truist Insurance Holdings CEO also said that the velocity of acquisitions would now increase.
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Management was speaking after the announcement that Stone Point finalized a deal with Truist to acquire a 20% stake in its insurance broking business at a valuation of $14.75bn.
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The ~$1bn Ebitda business is seeking a minority private equity buy-in to unlock value for its banking parent, and to create equity incentives for staff.
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Inside P&C’s news team runs you through the key highlights of the week.
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Stone Point and Clayton Dubilier & Rice are believed to be the two remaining contenders vying for a 20% stake in Truist Insurance.
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Organic growth fell 90 basis points from 6.5% in Q3 2022, but both underlying exposure and inflation continued to provide gains.
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Inside P&C’s news team runs you through the key highlights of the week.
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All claims in the case were dismissed with prejudice, barring the parties from bringing the dispute to another US court.
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The bank is running a process to seek a minority stake sale of its broking arm, and is in talks with Stone Point and CD&R.
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Inside P&C’s news team runs you through the key highlights of the week.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Sources have suggested bids at the top end were around 16x marketing Ebitda of just over $1bn.
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Although 2022 was on balance, a good year, macro-economic issues such as a slowing economy, falling employment, and loss cost reversion could create an overhang for 2023.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Inside P&C’s news team runs you through the key highlights of the week.
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As the super-cycle slows and the economic landscape becomes more uncertain, brokers will face pressure, though a cooling labor market may aid margins.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Margins contracted as performance-based incentives and T&E costs increased.
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Prior to joining CRC, Gulati spent 10 years at AmTrust in various underwriting management and business development roles.
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With the deal, CRC expects to increase its annual premium to $31.5bn from $23.5bn and grow its staff to over 5,100 employees across North America.
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While brokers continue to report positive earnings, the possibility of a downturn shouldn’t be discounted.
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The bank-owned broker reported positive earnings despite economic conditions, but results may vary for other brokers.
