Willis Re 2.0 Faces Competition for Talent and Market Share in Consolidated Reinsurance Broking Market.

Willis Re 2.0, WTW's reinsurance broking joint venture with Bain Capital, faces intense competition for talent and market share in a highly consolidated market. The top four players hold a 90% share, and success depends on targeting new themes like cyber and climate risks. WTW has yet to announce its plans, with speculation around potential M&A. Private brokers like Lockton Re have benefited from consolidation at the top end of the market.

In the dynamic world of insurance and reinsurance, global brokerage giant Willis Towers Watson (WTW) is making waves with its strategic re-entry into the treaty reinsurance broking market. The move, a joint venture with private investment firm Bain Capital, comes amidst intense competition and consolidation in the industry [1].

WTW, which divested its treaty reinsurance brokerage operations to Gallagher for $3.25 billion in 2021 [1], has now confirmed its intention to re-enter the market. With a minority share in the new company, WTW aims to combine its rich history, leading global network, and expertise in insurance broking, consulting, and technology with Bain Capital's scaled team of insurance industry experts and proven track record [1].

The strategic re-entry into reinsurance is a thoughtful approach for WTW, as it seeks to enhance its business mix and tap into the high-growth potential of this market segment. Over the last three years, WTW has successfully executed its Grow, Simplify, and Transform strategic priorities, revitalizing the company through strategic investments in talent and technology, streamlined operating models, and cost structure optimizations [1].

However, the reinsurance broking market is highly consolidated, with the top four players holding a 90% share [2]. Success in this environment depends on targeting new themes like cyber and climate risks, which are becoming increasingly important in today's risk landscape [2].

Private brokers like Lockton Re have benefited from consolidation at the top end of the market, but the intense competition for talent and market share presents challenges for new entrants like Willis Re 2.0 [2]. As WTW executives commented during the recent Investor Day, the company could potentially acquire complete ownership of the new reinsurance broking joint venture over time [1].

In conclusion, Willis Towers Watson's strategic re-entry into the reinsurance broking market via a joint venture with Bain Capital is a testament to the company's resilience and adaptability in the face of industry consolidation. With a rich history, leading global network, and a proven track record of innovation and growth, Willis Re 2.0 is well-positioned to navigate the challenges and capitalize on the opportunities in this dynamic market.

References:
[1] Reinsurance News. (2023, February 14). WTW confirms return to treaty reinsurance broking market via Bain Capital joint venture. https://www.reinsurancene.ws/wtw-confirms-return-to-treaty-reinsurance-broking-market-via-bain-capital-joint-venture/
[2] Reinsurance News. (2023, February 16). WTW could acquire complete ownership of reinsurance broking JV, CEO Hess says. https://www.reinsurancene.ws/wtw-could-acquire-complete-ownership-of-reinsurance-broking-jv-ceo-hess/