Insurance Agency Mergers Hit Near-Record in First Half 2019

July 24, 2019

There were 328 announced U.S. and Canadian insurance agency mergers and acquisitions during the first half of 2019, the second-highest six-month total, trailing only the first half of 2017 when 333 transactions were reported, according to OPTIS Partners’ M&A database.

There were 300 deals in the first half of 2018. A record 665 transactions closed in the past 12 months.

The OPTIS 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.

“The aggressiveness of buyers continues to push pricing and transaction counts to new highs,” said Timothy J. Cunningham, managing partner of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.

Buyers and Sellers

The report breaks down buyers into four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others.

Out of 67 PE-backed/hybrid buyers active since 2008, 28 made acquisitions in the first half of 2019, the highest total of any six-month period other than the first half of last year, when 30 completed one or more acquisitions. This buyer group accounted for nearly two-thirds of all announced transactions in the past 12 months.

Acrisure led all buyers with 39 transactions in the first half, but that’s their lowest six-month total since 2016. Other top buyers were Hub International (26 deals), Patriot Growth (21), Assured Partners (21),Broadstreet Partners (18) and Arthur J. Gallagher (16).

Sellers for the first half of the year by type of agency were P/C-only agencies (169 announced transactions), employee benefits agencies (82 sales), P/C/benefits brokers 46 deals), and all others (31 transactions).

Canadian Activity

Twenty-seven out of the 328 reported deals took place in Canada, representing over 8% of the total, the highest count and percentage of Canadian-based sellers ever for the first six months of a year. Hub International completed nine of the 27 deals while 13 other firms completed the remaining 18 transactions.

Not all transactions are announced, so the actual number of agency sales undoubtedly exceeded number reported, according to Daniel P. Menzer of OPTIS Partners. “But our data collection process is consistent from period to period and includes a variety of sources,” he said. “We’re confident the deal activity measured over time reflects of the overall M&A marketplace.”

Chicago-based OPTIS Partners offers merger & acquisition representation for buyers and sellers.

Source: OPTIS Partners

Topics Mergers Agencies Property Casualty Canada

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