News + Notes: Gallagher buys Buck for $660 million, FinTech firms fight human trafficking and more: Risk & Insurance
The latest announcements, partnerships and products that will impact the insurance industry today.
Global Insurance Companies Responsible for $900 Million in Lawsuits from Chapecoense Crash Victims
An English court ruled against many of the world’s biggest reinsurers, led by Tokio Marine Kiln Syndicates Limited, in their attempt to block lawsuits brought in Miami by victims of the 2016 Chapecoense air disaster.
The lawsuit arises from the tragic events of November 28, 2016, when a plane carrying the Brazilian soccer team Chapecoense, team directors, journalists and crew members crashed in a mountainous area near the international airport serving Medellín, Colombia.
In December 2020, the victims reached an $844 million settlement with the airline that carried the team. After the settlement, the victims’ lawyers, Miami-based Podhurst Orseck, filed claims in state court in Miami-Dade County against the airline’s reinsurers, led by Tokio Marine, to hold them liable for the victims’ injuries.
The reinsurers filed a separate lawsuit in London to enjoin the Miami negotiations.
The ban secured by the reinsurers in March 2021 was lifted in London on 21 December 2022. Tokio Marine and the other reinsurers must compensate the victims for their costs and legal fees. The financial exposure of the reinsurers, which has grown to over $920 million including interest, is significant.
Steven Marks, solicitor for the victims, said: “The issuing of an anti-suit on an ex parte basis unfortunately delayed our search for justice on their behalf, but after almost two years of intensive litigation in England, we are delighted that the High Court quashed the direct the injunction on our clients’ claims against the reinsurers. We look forward to continuing to work towards justice on behalf of our clients, and we hope that Tokio Marine and the other reinsurers have put in place adequate reserves to cover their exposure.”
Top FinTech and RegTech Firms Launch Platform to Prevent Human Trafficking
Freedom ID has been launched by a consortium of FinTech, RegTech, cybersecurity and identity providers from around the world, who have come together to bring technology to the fight against human trafficking and support individuals seeking safe passage and refuge.
Originally developed to help protect Ukrainian refugees, Freedom ID now aims to become the global standard for protecting vulnerable people displaced by any crisis.
Zenoo’s digital onboarding platform, which powers Freedom ID, focuses on capturing user information. The other FinTech partners offer solutions for identity verification, which enable Freedom ID to carry out the necessary checks to prevent criminal activity.
The platform is designed to integrate other technologies and data sources and provide a user-friendly solution for governments, NGOs and other organizations in their fight against human trafficking. It is free to use social networks, accommodation hosts and volunteers who help protect Ukrainians from these threats.
Stuart Watkins, CEO of Zenoo, said: “Times of mass migration when refugees are fleeing war are prime territory for highly sophisticated criminal organizations to take advantage of vulnerable women and children. By verifying the identity of the accommodation hosts, we reduce the risk of human trafficking. On top of this, we know that millions of displaced refugees will move from one accommodation provider to another over the coming years and this process of ID verification must continue in line with this.”
Gallagher announces deal to buy Buck for $660 million
Global insurance brokerage, risk management and consulting firm Arthur J. Gallagher has announced an agreement to acquire the partnership interests of BCHR Holdings LP, doing business as Buck.
Valued at $660 million, it is the firm’s largest HR benefits acquisition to date.
Headquartered in Rolling Meadows, Ill., Gallagher provides these services in approximately 130 countries through its proprietary businesses and a network of correspondent brokers and consultants.
Buck is a provider of pension, HR and employee benefits consulting and administration services. The organization has a long history, which goes back over 100 years, and a diverse customer base of both size and industry. With over 2,300 employees, including more than 220 chartered actuaries, Buck primarily serves clients throughout the United States, Canada and the United Kingdom.
Pursuant to the agreement, Gallagher will acquire the partnership interests of BCHR Holdings and its subsidiaries for a gross consideration of $660 million, or approximately $585 million net of agreed seller-financed expenses and net working capital. Gallagher expects to finance the transaction via free cash flow and short-term borrowings.
Before expected expense synergies of approximately $20 million, Buck’s pro forma adjusted trailing 12-month revenue and EBITDAC ending September 30, 2022, respectively, were approximately $280 million and $34 million. &
