Mergers & Acquisitions

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.

The deal is anticipated to make Liberty Mutual the second largest independent agency carrier in the U.S., adding $2.3 billion in premium and State Auto’s network of approximately 3,400 independent agencies.

The acquisition will allow SafeAuto to grow its platform in the non-standard space. Additionally, Progressive finalized the acquisition of transportation insurer Protective Insurance Corp. ahead of schedule.

Proposals by the Biden administration may cause agency owners interested in selling their business in the next five years to accelerate their timeline to 2021.