HRH Announces London Re Broker Deal
NU Online News Service, Oct. 15, 2:32 p.m. EDT?Hilb Rogal & Hobbs Company announced yesterday that it has signed a definitive agreement to acquire the stock of Alexander, Brooks & Stevens Limited, a London-based reinsurance broker.
The transaction is expected to be effective on Nov. 1. Terms of the deal were not disclosed.
According to the Richmond, Va.-based broker, ABS generated more than $4.1 million in revenue in 2002, providing reinsurance advice and service to a focused group of clients in England and other parts of Europe and the United States.
HRH said that ABS will continue to operate from its London offices under the leadership of its three founders, John V. Brooks, Robert J. Alexander and Richard D. Stevens, who will work closely with HRH's existing London retail operation, NIB/Lees Preston Ltd. and its managing director, Nicholas L. Morgan.
In a statement announcing the deal, Martin L. Vaughan, III, HRH's chairman and chief executive officer, said, "The acquisition of ABS, an active participant in the London, European and U.S. Market reinsurance business, represents a major shot in the arm for our reinsurance capabilities–a value segment targeted for expansion in our strategic plan."
Separately, last week, HRH said that its revenue for the year is coming in lower than expected. As a result, the company revised earlier guidance on revenues and operating earnings per share.
For the full year 2003, HRH expects organic revenue growth to be in the 5-7 percent range, instead of the previously anticipated 9-11 percent. In addition, HRH said its operating earnings per share will be at the lower end of the company's long-term goal of 15-20 annual growth.
For the third quarter, operating earnings per share is expected to in the 54-55 cents range, HRH said, noting that the figure for third-quarter 2002 was 53 cents.
The broker said that lower than expected organic revenue growth resulted from both industry trends and company-specific issues. For example, HRH said that its Hobbs operations experienced a decrease in net new business during the third quarter, the effects of softening in property insurance rates and a shortfall in executive benefit revenues–a business that was affected by proposed federal legislation and macroeconomic uncertainties.
In general, HRH's revenue was impacted by moderating premium increases, program redesigns and current economic conditions, the company said.
Mr. Vaughan said that the firm has nearly completed the planning process for integrating Hobbs and HRH, and will announce and launch the plan over the next 30 days.
HRH will release financial results for the 2003 third quarter on Oct. 20 after the market close.
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