New Zealand’s Commerce Commission is examining Aon’s proposal to acquire Willis Towers Watson after receiving a clearance application.

Aon has 58 offices throughout New Zealand, while Willis Towers Watson operates in Auckland, Wellington, Christchurch, Tauranga and Dunedin.

The Commerce Commission says both firms provide a range of insurance brokerage services in New Zealand including for commercial cover, reinsurance and personal and life insurance.

Aon’s application says the transaction would not result in a substantial lessening of competition in any New Zealand market.

Numerous strong competing brokers operate in non-life insurance distribution and would provide a “significant constraint” on the combined group, it says.

“Local brokers could expand, and additional brokers could enter, in response to any reduction in service levels or increase in prices by the combined entity post-transaction.

“There are many global examples of aggressive entry and expansion, including recently Gallagher taking an aggressive approach in Australia and New Zealand.”

In reinsurance, the application notes the global nature of the market and the fact that offshore brokers compete strongly for business from New Zealand cedents.

The Commerce Commission decision is due by December 11.