Arachas Corporate Brokers, the largest Irish insurance broker group, saw its net profit soar by 63 per cent last year, fuelled by acquisitions as it continued to play a leading role in ongoing consolidating the market.
The company, led by chief executive Conor Brennan, said that its net profit rose to €22.9 million from almost €14 million for the previous year, according to its latest annual financial statement, filed this week with the Companies Registration Office (CRO).
Revenues, mainly comprised of commissions and fees, jumped 31 per cent to €61 million.
Arachas, one of the most active dealmakers in the industry in the Republic in recent years, was itself acquired in 2020 by Ardonagh, a UK brokerage group that is backed by US private equity firms Madison Dearborn and HPS Partners, for €250 million.
The wider Irish market has seen a flurry of broker deals in the past six years as it followed waves of consolidation in the UK and North America. The ultimate backers of most of the purchasing vehicles are private equity firms, attracted to a sector that is fee-based and delivers steady revenues through the economic cycle. This allows buyers to service the debt needed to finance further deals.
Last year saw Arachas buy Mayo-based MCM Insurance Brokers, which is focused on the construction, hospitality and professional indemnity sectors, BJP Insurance in Dublin and Kilkenny-based fintech Orange Bear Consultancy for undisclosed sums.
It also agreed to purchase Waterford-based Hooper Dolan in a deal believed to be worth in excess of €60 million. Hooper Dolan’s assets were officially taken over by Arachas at the start of 2022.
This year has also seen Arachas seal a deal to buy family-owned Glennon Insurances in Dublin for an estimated figure of more than €90 million.
At the time of the Ardonagh purchase, Arachas had set its sights of doubling within five years the €270 million of annual gross premiums it was writing for everything from plumbers to sporting organisations. The Hooper Dolan and Glennon transactions have helped it achieve that target ahead of schedule.
Arachas, where former minister for finance Charlie McCreevy in an independent director, has also agreed to buy Dublin-based Stuart Insurances and Apex Insurance in Cork this year.
“Arachas is currently trading well as we continue to enhance the insurance solutions we provide customers and integrate more recent acquisitions,” said John McCarthy, chief financial officer of Arachas.
The latest accounts for Arachas also show that the company had a loan of €750,000 out to Mr Brennan as of the end of last year, carrying an annual interest rate of 13.5 per cent. The loan was repaid on January 1st.
The loan was part of the wider group’s management incentive scheme that allowed executives to purchase shares in the company and has subsequently been paid back in full,” a spokesman for Arachas said.
