Willis Towers Watson considering next steps for brokerage Miller

Willis Towers Watson PLC on Thursday said it is reviewing strategic options for its London-based wholesale business Miller Insurance Services LLP, the brokerage it acquired just over three years ago.

“Both parties agree that now is the appropriate time to consider next steps for Miller to maximize growth,” Willis Towers Watson said in a statement.

Both brokerages expect to have “ongoing relationships in certain aspects of the business where they remain closely aligned,” according to the statement.

Willis Towers Watson declined to comment further, but Miller has about 585 staff, according to the brokerage’s LinkedIn profile.

Willis Towers Watson could be looking to get out of the wholesale business and streamline the company for a potential sale, according to equity research analysts for property/casualty insurance at Wells Fargo Securities LLC in New York.

Last year, Willis Towers Watson was reported to be exploring a potential sale to Aon PLC, and “both companies confirmed the discussions which ended after a day and put aside negotiations for a one-year window which ends on March 6,” the Wells Fargo analysts wrote in a research note.

Marsh & McLennan Cos. Inc. sold Jardine Lloyd Thompson Group PLC’s wholesale business as part of the merger, which “could mean Willis is looking to shed a business that might be unattractive to Aon in a potential sale,” according to the note.

Miller accounts for 12% of Willis Towers Watson’s investment, risk and reinsurance unit revenue, which puts its revenues at around $196 million in 2019, the Wells Fargo insurance analysts wrote.

The sale of Miller could yield around $700 million to $800 million if it is sold at 4x revenue, they said.

Earlier this month, Willis Towers Watson reported that its wholesale revenue increased by 15% on an organic basis in the fourth quarter of 2019, driven by growth across its book.

Overall, the wholesale business was up 24%, including the results from Miller’s acquisition of Alston Gayler and Co. Ltd., Willis Towers Watson CEO John Hayley said during an earnings call with analysts.

Miller completed the acquisition of Alston Gayler, a U.K.-based insurance and reinsurance broker, for $67 million in December 2018.