Insurance brokerage mergers and acquisitions in the second quarter of 2009 was nearly half of what is was during the second quarter of 2008. Just 39 transactions were announced from April through June compared to last year when 71 transactions were announced during the same time period. Lackluster M&A activity has been the theme during the first half of the year which is down 40 percent from last year with just 90 announced transactions.
Arthur J. Gallagher (AJG) is the most active acquirer year-to-date. AJG announced seven acquisitions or approximately 8 percent of all transactions. AJG’s largest acquisition in 2009 came with the purchase of the policy renewal rights from Liberty Mutual Insurance Co. and Wausau Signature Agency LLC with a total potential deal value of approximately $165 million. Three of the seven transactions were of agencies located in Texas. Four of the announcements came in the second quarter.
Hub International (Hub) is not far behind AJG with five acquisitions in 2009. Like AJG, Hub acquired renewal rights to Liberty Mutual’s middle market commercial P/C business. Four acquisitions occurred in the second quarter with two wholesale agency purchases in Canada and two retail agency purchases in Washington. Hub found itself on the other side of a transaction when it divested of non-core assets in Florida. Hub sold Hub International Florida to Hector Fortun, the former owner of the Florida-based brokerage that was purchased by Hub in 2006.
Another acquirer found itself divesting of a previously purchased asset when the executive team of Sovereign Benefits Consulting (SBC) purchased the assets from Sovereign Bank in June. SBC was formerly known as hartz consulting group llc when the bank purchased the agency in 2006. The rebranded agency is now called Banyan Consulting.
Brown & Brown (B&B) and Ascension Insurance are tied as the third most acquisitive broker with four deals each. The slower M&A pace is evident when looking at B&B’s acquisition activity this year versus last year when it had already 18 transactions through June.
Ascension Insurance has acquired eight brokerages with revenues of $75 million since its formation. Expanding its commercial and employee benefits capabilities on the West Coast and adding specializations in student health insurance, employee benefits for non-profit organizations and claims administration, Ascension acquired three California-based agencies in June.
Insurance brokerage deal volume in 2009 is on track to be the lowest in nine years. While activity picked up a tad in June, it doesn’t compare to the past two years. Third quarter activity, which is historically slower, won’t break any records, but it may follow the trend set at the end of the second quarter and pick up slightly.
Merger & Acquisition Activity: April – June 2009
| Announced Date | Buyer | Seller | Seller Description |
|---|---|---|---|
| 05/27/09 | Ameriana Bancorp | Chapin-Hayworth Insurance Agency Inc. | IN, Retail P&C Agency |
| 06/05/09 | American Financial Group Inc. | Non-profit and employment liability book from AUSCO | IL, Wholesale P&C Agency |
| 06/29/09 | Apex Global Partners Inc. | Corrigan Jordan Insurance Agency | TX, Retail P&C Agency |
| 05/18/09 | Arthur J. Gallagher & Co. | Nourse Insurance Brokers Inc. | CA, Retail P&C Agency |
| 05/08/09 | Arthur J. Gallagher & Co. | Sellers Group LLC | TX, Retail Benefits Agency (Value: $2.0MM) |
| 06/04/09 | Arthur J. Gallagher & Co. | Creative Benefit Solutions LLC | KY, Retail Benefits Agency |
| 06/10/09 | Arthur J. Gallagher & Co. | Walker Taylor Agency Inc. | NC, Retail P&C Agency (Value $3.3MM) |
| 06/19/09 | Ascension Insurance Inc. | Renaissance Agencies Inc. | CA, Retail Benefits Agency |
| 06/19/09 | Ascension Insurance Inc. | Portal Group Holdings Inc. | CA, Retail P&C Agency (Revenue $7.0MM) |
| 06/19/09 | Ascension Insurance Inc. | Personal Insurance Administrators Inc. | CA, Retail Benefits TPA |
| 05/06/09 | Bollinger Inc. | Gail Steinberg & Co. Inc. | NY, Retail Benefits Agency |
| 04/10/09 | Brown & Brown Inc. | W.R. Reed & Co. | OR, Retail P&C Agency |
| 05/12/09 | Brown & Brown Inc. | Irving Weber Associates Inc. | NY, Retail P&C Agency |
| 04/27/09 | City Holding Co. | Patton Insurance Agency and Dickens & Clark | WV, Retail P&C Agencies Insurance Agency |
| 04/16/09 | Fortegra Financial Corp. | Bliss & Glennon Inc. | CA, Wholesale P&C Agency |
| 04/28/09 | Hector Fortun | Hub International Florida from Hub International Limited | FL, Retail P&C Agency |
| 04/14/09 | Higginbotham & Associates | Key & Piskuran Insurance Agency LLC | TX, Retail P&C Agency |
| 04/02/09 | Hub International Limited | Norac Intermediaries | Canada, Wholesale P&C Agency |
| 04/02/09 | Hub International Limited | Best Advice Financial Services | Canada, Wholesale Benefits Agency |
| 05/22/09 | Hub International Limited | Meier Insurance Agency Inc. | WA, Retail P&C Agency |
| 05/27/09 | Hub International Limited | Rettenmier Benefits Group Inc. | WA, Retail Benefits Agency |
| 06/25/09 | Management of Sovereign | Sovereign Benefits Consulting, Inc. from Sovereign Bank | PA, Retail P&C Agency Benefits Consulting Inc. |
| 05/19/09 | Northeast Bancorp | Goodrich Insurance Associates Inc. | ME, Retail P&C Agency (Value: $0.7MM) |
| 04/17/09 | Wells Fargo & Co. | North Coast Surety Insurance Services and North Coast | CA, Retail P&C Agencies Surety Technologies |
| 06/04/09 | Wells Fargo & Co. | Grady & Associates | NV, Retail Benefits Agency |
Topics Mergers & Acquisitions Agencies Florida Property Casualty Canada A.J. Gallagher Employee Benefits
Was this article valuable?
Here are more articles you may enjoy.
Florida Class Action Targets Litigation Funding Firm Over Data Breach 
South Florida Insurance Broker Pleads Guilty to Fraud in $133M ACA Enrollment Scheme 
NOAA Risks Loss of Data Network and Web Service 
Dog Bite Claims Soar in Frequency and Cost: Report From This Issue
