(Bloomberg) -- Willis Group Holdings Plc, the third-largest insurance broker by market value, agreed to take a majority stake in Miller Insurance Services LLP to add shipping clients.

Willis will take an 85% stake, and partners of Miller will retain the remainder, the London-based buyer said today in a statement that didn’t disclose terms. The deal is expected to be completed next quarter, according to the statement.

Willis Chief Executive Officer Dominic Casserley has been making acquisitions to add clients as he trims expenses by moving jobs to lower-cost locations. Casserley has announced at least seven deals since taking the top post in January of 2013.

Consolidation “is how the bigger brokers have been built,” Meyer Shields, an analyst at Keefe, Bruyette & Woods Inc., said in an interview before today’s announcement. Willis’s plan to maintain Miller as a separate brand could allow Casserley’s firm to build relationships “with clients or even employees who don’t want to work with, or for, one of the big global brokers.”

The deal will help Willis expand in the wholesale market, where companies act as intermediaries between retail brokers and insurers. Both companies started as marine insurers more than a century ago. Willis’ global marine business manages more than $2 billion of premiums annually, according to the company’s website.

“When you look at the wholesale market, what you’re talking about are individual niches of expertise that you can’t just replicate,” Shields said. Miller has a “very strong reputation but is at an intensified competitive disadvantage because of their size.”

The deal positions Willis to benefit from a rebound in shipping. Rates are still recovering after owners ordered too many vessels before the 2009 global recession.

Shipping Profits

The ClarkSea Index of industrywide earnings rose 0.4% to $12,232 a day in the 12 months through the middle of October, according to Clarkson Plc, the world’s largest ship broker. The 2012 average of $9,585.63 a day was the lowest since at least 1990. Earnings peaked at $50,702 a day in 2008, data show.

Miller, which has no external shareholders, had revenue of 112.9 million pounds ($190 million) in the year ended April 30, according to its website. The London-based company has offices in locations including Belgium, Malaysia, Hong Kong and Brazil.

Casserley’s acquisition strategy focuses on “specialty situations which have strong franchises,” he said Oct. 29 in a conference call, after announcing earlier in the month that his company was in talks with Miller. “We would not be going after volume.”

Willis announced plans in April to eliminate jobs and relocate 3,500 workers to lower-cost locations. The broker has about 18,000 employees in about 120 countries, according to its website.

Perella Weinberg Partners advised Willis, and Evercore Partners Inc. was the bank for Miller, a spokesman for the buyer said by phone.

--With assistance from Isaac Arnsdorf in New York.

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Willis to buy majority stake in Miller in ship-insurance bet

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