Agency Mergers Set Record with ‘Unstoppable Momentum’ in Q1: Optis

May 11, 2016

Insurance agency mergers and acquisitions hit an all-time high for the first quarter of a year, with 109 reported transactions in the first three months of 2016. The pace slightly outstripped 107 deals reported in the first quarter of 2015, according to OPTIS Partners’ M&A database..

The data covers U.S. and Canadian agencies selling primarily property/casualty insurance, agencies selling both P/C and employee benefits, and those selling only employee benefits.

OPTIS reported a record 455 M&A transactions in 2015.

“M&A activity seems to have unstoppable momentum,” said Timothy J. Cunningham, managing director of OPTIS, an investment banking and financial consulting firm specializing in the insurance industry.

The OPTIS report breaks down buyers into five groups: private-equity backed brokers, privately held brokers, publicly held brokers, banks, and all others.

PE-backed buyers continued to lead the charge with 50 transactions, a 25 percent increase over the same period last year. Top buyers were Acrisure (13 transactions), AssuredPartners (11 transactions) and Hub International (8 transactions).

Privately held brokers were the second largest group, completing 34 deals, down from 41 in Q1 2015. Publicly traded brokers completed 10 deals, down from 12. Bank acquisitions remained unchanged at seven. Transactions by all others numbered eight, up one.

Agency acquisitions continue to focus on P/C shops (63 announced transactions) and P/C and benefits brokers (21 deals). There were 10 employee benefits agency sales.

Several active buyers from prior years did not announce any transactions during the first quarter, including NFP, Integro, TowneBank, Eagle American Insurance, and J. Smith Lanier. However, nearly 30 firms that announced a transaction in Q1 had not announced any prior deals, OPTIS found.

“The actual number of sales was undoubtedly greater than the 109 reported during the quarter since many buyers and sellers do not announce transactions,” said Daniel P. Menzer, CPA, partner with OPTIS.

OPTIS Partners was ranked as the fifth most active agent-broker M&A advisory firm in 2014 and 2015 by SNL Financial.

Source: OPTIS Partners

Topics Mergers & Acquisitions Trends Agencies Property Casualty

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