The Biden administration has sued to dam the merger of two of the world’s largest insurance coverage brokers, asserting the deal might remove competitors, elevate costs and hamper innovation for US companies, employers and unions that use the businesses’ providers.
The Justice Division on Wednesday introduced the antitrust swimsuit filed in federal court docket in Washington searching for to cease AON’s proposed $30 billion acquisition of rival advantages and threat marketing consultant Willis Towers Watson.
Justice Division officers stated the proposed merger would convey collectively two of the “Large Three” international insurance coverage brokers — the third is Marsh McLennan — and remove competitors in 5 markets. They’re property, casualty and monetary threat, well being advantages, actuarial providers for sure pension plans, retiree insurance coverage exchanges and reinsurance.
The businesses present steering to many main US firms on administering well being and retirement advantages, with the intention of protecting prices down by managing threat.
From the tone of their joint assertion Wednesday, the businesses appeared inclined to contest the federal government’s case. They stated the Justice Division’s motion “displays a lack of know-how of our enterprise, the purchasers we serve and the marketplaces wherein we function.”
The 2 firms stated that the mix “will speed up innovation on behalf of purchasers creating extra selection in an already dynamic and aggressive market.”
In searching for separate approval for the merger from European Union authorities, the 2 firms agreed to divest a few of their belongings. However Justice Division officers stated Wednesday these wouldn’t be ample to guard US shoppers.
Each firms are based mostly in London and integrated in Eire. AON, with about $11 billion in income final 12 months, has some 100 workplaces within the US. Willis Towers Watson, with round $9 billion in 2020 income, has 80 US workplaces.