Server: Netscape-Enterprise/2.0a Date: Thu, 18 Dec 1997 09:53:01 GMT Accept-ranges: bytes Last-modified: Thu, 21 Aug 1997 13:21:46 GMT Content-length: 13920 Content-type: text/html
The Willis Corroon Group
has resulted from the combination of many firms, the most significant being
the mergers in 1987 of Willis Faber and Stewart Wrightson and in 1990 of
Willis Faber and Corroon & Black.
The origins of Willis Faber and Corroon & Black are fairly well documented, those of Stewart Wrightson less so. The Group's emergence can be seen to have occurred through a number of events which can be grouped into decades.
Willis Faber's origins lie in the early 19th century when Great Britain was the world's most powerful political and industrial nation, the largest supplier of manufactured goods and enjoying unrivalled mercantial supremacy. The City of London was the undisputed business capital of the world.
At that time three small insurance broking firms were established in the City, family firms of three merchants born within a few years of each other - Henry Dumas in 1794, George Henry Smith (three of whose sons changed their surname to its Latin equivalent, Faber) in 1779, and Henry Willis in 1800. All three men became Members of Lloyd's.
Henry Willis & Co was established in 1828, initially at the Baltic Coffee-house, as insurance brokers and commission agents principally concerned with marine hull insurance. The firm's name first appears in directories in 1863.
Dumas & Wylie was established 15 years later, in 1843, also as a Lloyd's broker. In the same decade we find the first evidence of an eventual part of the Stewart Wrightson group, a partnership between Galbraith and Henderson in 1848.
In the next decade, in 1858, the Group's German associate, C Wuppesahl & Co Assekuranzmakler, was established in Bremen.
In the final decade of the
century three vital links were forged. Firstly, in 1892, Henry Willis &
Co reached exclusive agreement with Johnson & Higgins of New York for
the placing of their marine business at Lloyd's. In 1898, Willis then merged
with Faber Brothers, themselves founded in 1886 (although George Henry
Faber had been in business on his own account since 1863). The following
year, the firm was granted an agency for The Tokio Marine & Fire Insurance
Company.
Around the same time the firm was building its European contacts, with agencies for the Italia and the Generali most prominent. Also, in 1897, the firm of Gibb & MacIntyre, founded in 1865, became James Gibb & Son, later to be part of Bray Gibb, as was Fletcher and Welton, a precursor firm of Stewart Smith (although Weltons later left this firm and re-appeared as E J Welton, acquired by Willis Faber in the 1920s).
In the first decade of the
new century more is seen of the other major elements of the Group. R A
Corroon & Co Inc was founded in New York, by Richard A Corroon, and
Matthews Wrightson and Arthur Bray & Son, two key Stewart Wrighton
components, in London. The Willis Faber partners set up the Cornhill Insurance
Company, and began expanding overseas with branches in Montreal and Hamburg.
The 1920s were an important decade for Willis Faber. Interests were acquired in Brodrick, Leitch & Kendall and Henry L Riseley - on these firms were built the Group's offices in Liverpool, Birmingham, Bristol and Cardiff; the latter acquisition brought with it the British & Irish Plate Glass Insurance Company, later re-named Sovereign. An agency with the Taisho (now Mitsui) was established (at the introduction of the Tokio). A treaty was placed for the new State Insurance Organisation of Soviet Russia, Gosstrakh. The firm was appointed to represent the Caja, of Chile, and Atlantic Mutual, of the USA, in the London market.
And at the very end of 1928 Willis Faber & Company merged with Dumas & Wylie to form Willis Faber & Dumas Limited, which started trading on 1 January, 1929.
Across the Atlantic R A Corroon,
by then concentrating on New York underwriting agency business as much
as on brokerage, set up Corroon & Reynolds Corporation to hold his
various interests; this company went public in 1929, the first publicly-held
broking business.
Few events of note are recorded for the next few decades, apart from the founding in 1931 in California by J H Miller of a company specialising in surety (construction bonds) business, which the following year became Miller & Day and, in 1939, Miller Day & Ames. In 1947 this firm was re-named Miller & Ames. In 1964 Corroon & Reynolds sold its underwriting operations to concentrate on the development of broking, 2 years later merging with C R Black Jr Corporation, a prestigious New York firm, to form Corroon & Black Corporation. In turn in 1968 Corroon & Black merged with Miller & Ames.
During the 1970s both Stewart Wrightson and Willis Faber obtained Stock Market quotations. In 1975 Willis moved into their award-winning new building in Ipswich, followed 2 years later by the move of the Head Office to Ten Trinity Square.
During the same decade, the
growth, through merger, of Corroon & Black gathered pace, with particularly
significant moves being the merger in 1970 with G L Hodson, the New York
reinsurance intemediary, and with Synercon Corporation, of Nashville, Tennessee,
in 1976, then the largest merger in US broking history and a move which
nearly doubled Corroon & Black's size.
Stewart Wrightson also grew in the 1970s through amalgamations of Bray Gibb, Matthews Wrightson and Stewart Smith, and on into the 1980s with Arbuthnot Insurance Services and Golding Collins being acquired. Corroon & Black continued to complete a series of mergers through the late 1970s and 1980s.
Willis Faber's growth in the 1970s was more organic; then in 1982 it acquired the London reinsurance specialist, Carter Wilkes & Fane, and in 1985 the influential Yorshire broker Rattray Daffern.
This set the stage for the creation of the present Group. Recognising the need to reduce its dependence on others to produce revenue, whether as reinsurance or as wholesale business to be placed in the London market, the Board of Willis Faber decided it was necessary to boost the Group's direct broking operations; at the same time, access was required to the US market, then the source of about half the world's insurance premiums.
The merger with Stewart Wrightson was the first step towards achieving these objectives, creating, in Willis Wrightson, the UK's largest direct broker, and providing through Stewart Smith and the US-based insurance companies substantial operations in the USA; at the same time this merger enhanced Willis' already pre-eminent international reinsurance broking position.
3 years later the Willis Faber
strategy was fulfilled with the merger with Corroon & Black, by then
the 5th largest US broker which itself was seeking to spread outside the
USA in order be able to offer a multinational service.
For the first 2 years after the merger much remained to be done to complete the new Group and its ability to operate globally. In particular multinational servicing capability had to be established through continental Europe, a task accomplished by mid-1992 with the establishment of a network of subsidiary or associate operations throughout Europe. At the same time many other offices were opened around the world as the Group built on its worldwide trading relationships to expand its direct account in the newly liberalising markets.
At the same time the US headquarters were moved from New York to Nashville, and a new regional organisation of the US direct broking operations undertaken. By the beginning of 1993 these stages had been completed, enabling the Group to operate as one of the then half-dozen broking organisations in the world providing a comprehensive global risk management and broking service to clients of all nationalities and in every sort of business.
The Group's financial results
in 1994 reflected the strain that this pace of investment had placed on
the balance sheet at a time when its profitability, particularly that of
its US retail operations, was under pressure from soft markets and acute
competition. As a result of a review of the Group's strategy and operations,
determined cost reduction measures were undertaken, and a sharper focus
adopted for the onward development of the Group, ensuring that its global
service and resources are targeted to those areas where it has or will
swiftly gain competitive advantage.
During 1995 a re-organisation of the Group's operations was completed, in which these were grouped into five business units - North American retail, UK retail, US wholesale, international, and global specialities, the latter comprising aerospace, energy, marine, reinsurance and global non-marine broking services. Simultaneous vigorous cost reduction measures, mostly covered by a substantial provision made against the 1994 profits, began to take effect, leading to significant improvement in the Group's profit and financial position by the end of the year.
Towards the end of the year the Group announced the appointment of John
Reeve as the first Chairman to come from outside its own ranks. Under his
leadership the Group undertook a major re-appraisal of strategy, with the
assistance of McKinsey & Co. Resulting from this the Group re-defined
its fundamental objective as the creation of enhanced shareholder value
as a professionally-managed, independent insurance broker and risk management
consultant, focusing on the optimum development of core businesses and
seeking to exploit existing Willis Corroon Group strengths. This objective
was to be pursued through three broad types of initiative:
1 Building leadership positions in chosen market sectors that fit together
as a coherent whole on a world-wide basis. To reinforce this approach,
individual business unit strategies were developed to achieve or maintain
leadership positions with stretching targets established for improved performance.
2 Raising profitability through implementation of a range of revenue and
margin enhancement programmes and cost reduction and service improvement
initiatives.
3 Pursuing growth opportunities, both in respect of existing core operations,
locally and geographically, and in relation to new development opportunities.
While organic development was preferred, acquisitions were to be pursued
where organic growth is not feasible or is too slow, subject to meeting
criteria for cultural fit, financial returns and manageable size.
Concurrently, a number of
other initiatives were undertaken, including the disposal of certain non-core
assets, including certain businesses, which, in conjunction with a marked
improvement in profitability throughout 1996, enabled the Group to end
that year with no net borrowings and a substantially stronger balance sheet.
The several elements of the new strategy were synthesised into a new Vision for the Group, which was launched to all staff in late 1996. This envisages the evolution of the Group, building on its established advisory and transactional capabilities, into a world-wide knowledge-based professional services organisation. The Vision in turn has led to the development of a comprehensive change programme which the Group will continue to implement through 1997 and 1998.
The Group's immediate priority in mid-1996 was to establish a momentum of change and improvement in existing core businesses and to reinforce leadership positions in chosen market sectors; once this momentum had been established, broader growth opportunities were to be considered. Although by the spring of 1997 consolidation among major insurance brokers had resulted in significant shifts in the competitive environment, the resulting large combinations were seen by the Group to create opportunities as well as challenges. The Group intends to continue to pursue an aggressive change programme designed fundamentally to alter the way that it does business and to seize new development opportunities arising within the altered market-place, with the clear objective of enhancing shareholder value over time.
For further information, contact:
Willis Corroon Group
Ten Trinity Square
London EC3P 3AX
Telephone (0) 71 488 8111
Return to Willis Corroon Group
Last updated 21-August-1997
© Copyright 1997 Willis Corroon
If you have any comments, please email webmaster@wilcor.com