Mergers & Acquisitions

The number of mergers & acquisitions announced was the lowest since 2019 and 7% below the five-year average for deals.

Despite various economic and political challenges, the number of mergers & acquisitions deals in 2022 meant it was the second-most active year in history.

Even as the fall reflected a return to “normal” after a spike in mergers & acquisitions last year, the third quarter of 2022 was the second-busiest quarter for M&A activity ever.

There were 427 announced insurance agency mergers and acquisitions during the first half of 2022, up 16% from 369 for the same period in 2021, according to OPTIS Partners.

The increase in agency merger & acquisition rates was caused by investors flush with capital continuing to meet an increasing supply of aging owners taking advantage of all-time high valuations.

Record valuations and the looming threat of a sizable increase to capital gains tax have been among the primary factors leading agency owners to sell.

Lemonade will acquire auto insurer Metromile in an all-stock transaction for just over $200 million net of cash.

An aging group of owners looking at all-time high valuations and expecting future tax increases has spurred a jump in increased merger activity.

Hagerty will join a growing list of other insurance companies that recently went public via special purpose acquisition company (SPAC), including Hippo and Lemonade.

The firms have agreed to terminate their $30 billion deal and end litigation with the U.S. Department of Justice.