Insurance broker Lockton Ireland agrees fourth deal of 2022

Global insurance broker Lockton’s Irish operation has struck its fourth deal since the start of the year by agreeing to buy Waterford corporate pension advisory company Fitzgerald Life & Pensions.

Lockton Ireland, which has been active in the market since 1982 as a general insurance broker, hired senior New Ireland Assurance executives Ray McKenna and Niall O’Callaghan last year to develop a strategy to get into the employee benefits space.

The four acquisitions – which also include health insurance advisory firm TotalHealthCover.ie; corporate pensions adviser Independent Financial Advisory Trust; and Burke Pensions & Financial Services – have cost the group close to €10 million in total, according to Mr McKenna.

Mr McKenna said the company has another deal in the pipeline. However, he added that it is becoming more cautious as price expectations among would-be sellers have been increasing of late as a result of some of the “crazy” valuation multiples – relative to earnings – that the general insurance broker market has seen in recent times as consolidation in that sector continues at pace.

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The latest purchase will increase the company’s number of corporate clients to 350 and raises its Irish employee base to more than 40.

Lockton Ireland expects to continue to increase its Irish headcount in the coming months, bringing the total workforce to around 60. The firm also expects that its 2022 acquisitions will push its Irish business’s annualised revenues to about €7 million by April 2023. Some 40 per cent of that will come from organic growth, according to Mr McKenna.

The Irish entity, registered as Lockton Insurance Brokers Ireland Ltd, reported turnover of €2.29 million for the year to April 2021, down from €3.49 million for the prior year, according to its latest set of financial accounts.

The Irish pensions market is navigating new EU pension legislation (IORP II), which brings a new layer of corporate governance and regulatory requirements to the pensions market from the start of 2023. As part of this employers need to decide whether to work with the far more onerous regulations under IOPR II or move their employee pension scheme to a so-called master trust.