Robust agency M&A activity reported for Q1
During the first quarter of 2018, 142 insurance agency mergers and acquisitions were announced, according to investment banking and financial consulting firm OPTIS Partners. Of those, 51 were firms that deal in employee benefits.
That compares with the 186 deals reported during the first quarter of 2017, including the 24 independent insurance brokers and benefits agencies that finalized their merger to form the Alera Group on January 1st.
The OPTIS database covers U.S. and Canadian agencies solely selling employee benefits; firms that sell both employee benefits and property and casualty coverage, and P&C agencies.
The drop in deal count from Q1, 2017, is not indicative of a decline in overall M&A activity, according to OPTIS Partners managing director Timothy Cunningham. “Buyers remain very aggressive on valuations and sellers continue to come out of the woodwork,” he says.
OPTIS Partners’ M&A database classifies buyers into four categories: private equity-backed or hybrid brokers, privately-held brokers, publicly-held brokers and all others. Insurance brokers Acrisure and HUB International led all buyers with 28 transactions each, followed by AssuredPartners with 10, Alera Group with eight, Broadstreet Partners with seven and Arthur J. Gallagher with six.
Private equity-backed or hybrid brokers were the lead buyer segment, completing more than 60% of the total transactions.
Not all M&A activity is reported, and Daniel Menzer, a CPA and OPTIS Partners partner says the actual number of agency sales exceeds the 142 reported. “However,” he adds, “because our database tracks a consistent pool of the most active acquirers, it’s a fairly accurate barometer of activity.”