Gallagher has recently strengthened its focus on building national industry practices such as trucking with the acquisition of specialist commercial insurance broker Palmer Atlantic.
Gallagher has identified long-haul transportation as a priority market segment, and that made Palmer Atlantic a natural choice for an acquisition, according to Phillip Gaunce, the Atlantic region president and chief operating officer for Gallagher in Canada.
Based in Hartland, N.B., Palmer Atlantic has been serving clients across the Atlantic region with tailored risk management and commercial insurance solutions for more than 40 years. Founded in 1976, the trucking insurance specialist in Atlantic Canada has expertise in long-haul transportation and logistics, in addition to serving a wide range of industries and clients.
“Our goal is to build a strong transportation practice and be a leader in this market, and Palmer Atlantic was a natural fit based on their expertise and market share in trucking insurance,” Gaunce told Canadian Underwriter in an email Friday. “The Palmer family also has a history in the trucking business, as one of the founders of Day & Ross – one of Canada’s largest logistics and transportation providers. To say the management understands this industry would be an understatement.”
The trucking segment can be a challenging line of business. A 2016 Marsh report on the Canadian insurance market noted that the transportation and logistics sector was seeing rate increases of between 2% and 10% as of 2015 Q4, the latest date for which statistics were available. Risks in the trucking sector included a shortage of qualified drivers in the country, increased liability for shippers, and a tendency for cargo handlers to seek higher limits and broader coverage terms, Marsh observes.
“Losses and exposure can be quite high, which is why it is important that products are priced and serviced correctly,” Gaunce said. “This places greater importance on claims management, loss control and truly understanding the trucking business, to provide the expertise and services this industry requires from its insurance providers.
“Gallagher has the necessary expertise and unique capabilities to successfully grow a profitable transportation practice. The transportation industry is dynamic and presents an excellent growth opportunity for us in the long term.”
Joe Palmer, president and CEO of Palmer Atlantic, said: “We’re proud to have built a company with such a strong transportation focus and commitment to providing our clients with all the tools they need to both protect and grow their businesses. Becoming part of Gallagher — with its extensive footprint across Canada, the whole of North America and global reach — will enable us to tap into a greater depth of resources and breadth of insurers, creating even more choice for our customers.”
Gaunce told Canadian Underwriter the acquisition improved Gallagher’s footprint in Canada, broadening networks and contacts throughout the country. “Gallagher plans to grow both organically and through further acquisition in Canada,” he added.
Gallagher has done six acquisitions since 2014, when it acquired signed a $422-million agreement to acquire Noraxis Capital Corporation, a Canadian insurance broker network providing retail commercial, personal and employee benefits insurance products and services.
Terms of the Palmer Atlantic deal were not disclosed.