Mergers & Acquisitions

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.

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.