New boss aims to make Gallagher the nation’s top insurance broker
Upon entering the Dublin offices of insurance broker First Ireland, there is a spot of confusion among staff – where exactly is the new boss, Ronan Foley?
In January, First Ireland was acquired by S&P 500-listed insurance broker giant Gallagher.
Foley, who became CEO of Gallagher’s Irish operation last year when it acquired his Innovu business, played a significant role in the deal – but he’s yet to get his own office.
Currently set up in a meeting room on the top floor looking out over the River Liffey, Foley says he is excited to get settled in his new surroundings – and get his own office.
Foley (55) has a long history with First Ireland, stretching back to when he first started in the insurance sector a few decades ago.
“I have known this business for a long, long time,” he says. “I used to come here as a junior sales representative and sell household and motor insurance to them.
“The management team here are so strong, and have a huge reputation in the marketplace. They have a strong commercial acumen and a very strong personal lines business.
“All these opportunities are about the people. So when I met with the chairman and the wider team, there was a connection straight away.”
It’s not all about reflecting on the past for Foley. The Dubliner has big plans for Gallagher – and the acquisition of First Ireland is just the start.
“This gave us a great opportunity to effectively double the size of the business overnight,” he says. “That was a significant development for Gallagher in Ireland.”
Foley hopes to build Gallagher – which is among the largest brokers globally – into the third largest brokerage in Ireland by the end of the year. That would require a written premium size of around €250m. It is currently at €140m in Ireland, with 80,000 customers and 275 employees.
Ireland’s broker network of around 1,200 firms has been going through a phase of rapid consolidation over the past few years.
Gallagher and other trade and private equity-backed players – including the likes of PIB Group, Arachas and Aston Lark – have methodically set about acquiring smaller Irish firms as a means of building up their geographical and sectoral presence.
Deals involving small brokers have become common, with news of fresh acquisitions hitting the headlines almost every month.
Arthur J Gallagher set up shop in Ireland after it acquired Foley’s private equity-backed broker Innovu last June. Innovu itself had expanded in the same manner, buying several brokers, including Sheridan and PE Kelly Insurances.
Last November, Gallagher purchased Wexford-based Doyle Mahon Insurances – and its appetite for deals is not yet sated. It is in exclusivity on three more acquisitions, which Foley expects will close this year.
Once those are done, he anticipates pausing – before kicking off again in 2024.
Foley is obviously a veteran of insurance broker M&As. So what is driving the deals?
“If you look at the Irish broker model, there are a lot of brokers here,” says Foley. “The UK has gone through a massive consolidation in this area, and the next best obvious market was Ireland, which was untouched up until a few years ago.”
Foley believes the sector will see more M&A activity over the next 18 to 24 months.
“Possibly a bit longer,” he says. “It will begin to scale back a bit in terms of frequency of deals, but there is still a way to go.”
As the significant players jostle for acquisitions, the competition to get a deal over the line is heating up fast. As a result, valuations are higher than they have been for about four years, says Foley.
Referencing the First Ireland deal, he says the competition was fierce.
“It was a competitive process, but it was really enjoyable,” he says. “There are very few large deals left in the country. There were a lot of eyes on this jewel in Dublin, which has a national spread anyway.”
With consolidation in the broker sector heating up, what does it all mean for consumers? Even though there are set to be fewer brokers, Foley believes consumers will benefit from more choice, not less.
“It works the opposite way,” he says. “What happens is, compared to being with a smaller broker, being part of a larger broker gives you access to more competitive rates, a choice of policies, and more capacity – in terms of access to new products on an international basis.
“Also, if they have risks abroad or live abroad with risks here, we can cater for them on all that. It broadens out that offering and makes it more competitive for customers – they should see better cover and competitive pricing.”
‘I landed a really strong, Irish-based partner with MML. That was exciting – and a risk’
Foley grew up on the North Strand in Dublin. His father managed several Madigan Group pubs and hotels, and also helped set up the Sands Hotel in Portmarnock.
In school in north Dublin, Foley’s English and geography teacher was author Roddy Doyle.
“Being taught by Roddy was amazing – he was in the middle of writing The Commitments at the time. A lot of it was based around the people he knew in the area. I’ve kept in touch with him over the years.”
Foley kicked off his career in insurance around 1985 after his sister helped get him into the AA. Over that first summer, he was selling international licences.
Having got a taste for sales, he offered to work for free at AA’s insurance arm.
“I went up to the attic, which had no windows, and this room was full of files everywhere. I spent three months up there working for nothing. As a result of that, I got offered a sales job.”
Foley rose through the ranks at AA, before leaving for a varied career across insurance.
Over the years, Foley climbed the corporate ladder in Ireland.
Around 2004, he moved to the UK to help Chubb Insurance turn around its business in England’s south-east.
“I jumped on a plane with our six-month-old child, and moved the whole family over for the best part of four years,” he says. “We had the best time over there.”
When he returned to Ireland, he made the next step up, becoming managing director of Ecclesiastical Insurance Group in Ireland and then CEO of IPB Insurance in 2011. He also later became chairman of The Ireland Funds.
In 2018, Foley made his “big move” – moving out of the corporate world and setting up Innovu with the backing of private equity firm MML Growth Capital Partners Ireland.
“I landed a really strong, Irish-based partner with MML. That was exciting – and a risk. Moving from corporate, where it is steady and secure, and then deciding to do something different.
“I’m glad I’d the guts – and the backing of my wife. It was a big call, but it was the best thing I ever did.”
MML took a significant stake in Wexford-based Sheridan Insurances, one of Ireland’s largest brokers. Foley joined as CEO, and Innovu was born.
Innovu grew fast, acquiring various firms and developing a solid presence in the south-east of Ireland. When it acquired PE Kelly Insurances in October 2021, it had gross written premiums of around €67m. Innovu’s results for 2021 show the business had a profit of nearly €1.65m for the year.
With the private-equity model meaning MML would always look to cash in its chips after a few years, Innovu was attracting interest.
Foley thought Innovu would be sold to another private-equity firm, and there was strong interest from that space. However, trade came in strong too – and Gallagher was the one he and MML liked the most.
“They were competitive and willing to move quickly. We felt there was a good future with the world’s third-largest broker.”
He fears businesses and homes not taking out adequate levels of insurance, due to rising costs
Innovu was sold to Gallagher last June, with Foley saying MML were happy with the deal.
“It was a plan executed perfectly.”
Now with Gallagher, Foley has been working hard on his growth plan. Acquisitions are a quick means of winning scale, but Foley highlights organic growth as being even more important.
“We are a broker built on sales and customer service – those are top of the agenda. If we’re not growing, we’ve not earned our licence to acquire.
“We grew 8pc in Ireland last year, outside of acquisitions. Acquisitions give you the scale quickly, which is attractive in size and expertise. That can help you grow better organically.”
He outlines the challenges facing brokers. Personal lines like household and motor will come under pressure from direct underwriters.
“The broking community will have to come up with better models and options for clients to compete with direct underwriters. That’s what we plan to do.”
Foley says building inflation will inevitably lead to the price of insurance for commercial and privately owned homes increasing. But his biggest worry is underinsurance, and he fears businesses and homes not taking out adequate levels of insurance, due to rising costs.
“We are spending a lot of time on this, to ensure adequate sums are insured and people are insured correctly – that’s a key factor.”
Foley is looking to tap into expertise at Gallagher to develop “key niches” here, such as marine, aviation and high-net-worth personal insurance.
He believes there is a big interest from Gallagher to grow its Irish business. Having effectively doubled in size over the last six months, he now wants to compete at the highest level.
“We want to be number one within the next five years,” he says. “There is massive support from the team across the pond in the UK and from Pat Gallagher himself in the US.
“They are so excited about what we are doing in Ireland,” he adds. “It’s great to have this challenge at this stage of my career and feel so energised about the future.”
Name: Ronan Foley
Position: Chief executive officer of Gallagher Ireland
Hails from: North Strand, Dublin
Education: Kilbarrack National School & Greendale Community School, Dublin
Marketing degree at the Marketing Institute of Ireland
Lives: Dún Laoghaire
Family: He and his wife Annette have two children – Mia (22) and Sian (20)
Favourite hobby: Fishing
Favourite book: ‘The Secret Race’ by Daniel Coyle and Tyler Hamilton
Favourite film: Twelve Angry Men
What is the most valuable lesson you have learned in business throughout your career?
“When faced with a difficult or challenging situation, and you’re close to being worn out by it, it is at that moment you need to be at your most resilient and tenacious. Whenever I’ve hit a junction where it would be easy to throw in the towel, it is at that point you need to get out of bed and get going again – you might miss the opportunity.”
What has your experience with M&A taught you?
“It’s taught me humility. At the end of the day, the individuals that own these businesses have all done incredible jobs.”