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Insurer in Full: Aon and WTW: From courting to the courtroom

Aon’s recent move to sue WTW over its lift out of a team of Massachusetts-based construction specialists is perhaps a sign that the rivalry has fully returned to normal between two broking giants that just a year ago were presenting a united front...

Today marks the one-year anniversary of Aon and WTW calling off their planned merger, a deal that would have created a broking behemoth. 

The anniversary comes after news emerged that WTW is facing a suit from its erstwhile suitor. 

Aon sued its rival earlier this month, alleging eight of the 11-strong team that joined WTW from its construction and infrastructure group have breached their contractual obligations.

A lawsuit had seemed almost inevitable since The Insurer broke the news of the team’s departure to WTW. It is not unusual for litigation to arise from the lift-out of a team that large, as the jilted company moves to protect its business.

And in the lawsuit, Aon alleges that three clients representing over $1.3mn in yearly revenue had already left it for WTW. “Additional Aon client relationships are believed to be at risk,” the complaint added.

This all feels a far cry from July 2021, when Aon and WTW were presenting a unified front in litigation as they attempted to – ultimately unsuccessfully – overcome the US Department of Justice’s lawsuit blocking their merger.

But it is not the first litigation between the two former merger partners. 

WTW in November last year sued Aon’s reinsurance solutions unit in a Miami-Dade County circuit court over hires from its fac team, alleging breach of contract from the defendants’ soliciting of clients.

That lawsuit followed the seven defendants in the case – which represented half of the 14 facultative CAC brokers from WTW CAC’s Miami office at the time – resigning within minutes of each other in August, soon after the merger fell through.

As this publication reported, Aon this month made a filing in support of its motion to dismiss WTW’s lawsuit against it and the individual defendants, with the litigation proceeding despite the parties last month suggesting they may be close to a settlement.

Moving between the once-time merger partners

It is perfectly normal for two of the largest brokers to have talent moving between each other.

And in the year since the deal was scrapped, there have been several high-profile hires and disputes between two companies.

Aon has probably taken the lion’s share, however. 

For example, on Friday this publication revealed that Aon has hired Matthew Hannon from WTW to head up broking in its US casualty practice. Hannon was most recently executive vice president and large and complex casualty broking leader for the Midwest region of WTW, based in Chicago, Illinois. 

Another high-profile Aon hire from WTW was that of Joe Peiser, who last year took on the role of commercial risk leader for North America, as also revealed by this publication

The departures from WTW to Aon perhaps carry a bigger sting than the usual hires by a rival, given the departed executives would likely have been part of the combined Aon-WTW had that deal come to fruition and thus would not be leaving now. 

The departures from Aon to WTW also followed the latter suffering an elevated number of key employees leaving amid the uncertainty while the proposed merger was still dragging on. 

As this publication has previously reported, Miami was the location of a particularly high number of departures, with WTW resorting to litigation as a result in suits filed against Lockton, Guy Carpenter, Marsh, Alliant as well as Aon.

Other notable exits from WTW took place further north, with over 20 staff leaving to join NFP’s fast-growing insurance broking business in Canada including WTW Canada’s former president and CEO Brian Parsons.

So perhaps another way of looking at the new lawsuit is that it is a sign that business is returning to normal for WTW. It shows that WTW has enough appeal again to attract big hires. 

This publication reported in November that WTW had pulled off probably its biggest recruitment coup to date since talks with Aon were called off, with the hire of Netherlands-based Aon Commercial Risks heavyweight Hugo Wegbrans.

And just last week WTW announced the arrival of a team of five senior Houston-based energy brokers led by Marsh executive Bill Helander, and including two hires from Aon, after this publication had exclusively linked them with the move.

In February WTW’s head of Risk and Broking Adam Garrard had said the broker’s hiring levels in January 2022 were “the highest in over two years”. Garrard added that the company was investing to meet what he called “our unashamedly ambitious targets” amid “the age of risk”. 

WTW will be hoping to attract a few more big hitters as it gets its swagger back after, first, more than a year of planning for a merger that did not happen and, then, a year of regaining its feet that included the sale of its reinsurance broking unit.

 

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