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.
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, an investment banking and financial consulting firm specializing in the insurance industry.
The pace of recorded deals in the first six months of 2022 is 13% above the previous five-year first-half average, a period regarded as the most active M&A market ever, according to the M&A database of OPTIS Partners. Following the typical first-quarter lull, the second quarter of 2022 shot up 20% in volume to become the fourth most-active quarter of all time.
“One of the drivers is the expanded appetite of the most active buyers to look at businesses adjacent to the agency-brokerage business," said Steve Germundson, a partner at OPTIS Partners. “Some 53 of the 427 announced deals came out of life and financial services, actuarial and human resources consulting, technology, and other business related to insurance distribution."
It was not too surprising that the number of deals done in the traditional agent-broker segment was almost flat at a 1.5% increase, noted OPTIS managing partner Timothy J. Cunningham.
“There simply aren't the same number of sellers there as in the past," he said. “But buyers still have a lot of capital to deploy, and they are finding opportunities to fill other needs in their businesses with firms in this expanded space."
The 10 most-active buyers accounted for 55% of all the deals announced so far in 2022 while 72 buyers accounted for the remaining 45% and 43 buyers made only one acquisition.
Among buyers, PCF took the top spot for the first time with 48 completed deals in 2022 so far. This is a 70% increase over the same period in 2022. Acrisure with 43 and Hub with 35 followed, both of them marking 40% increases over the prior year.
Others that saw significant jumps in their deal count were Inszone (up 20 deals), which increased its number of deals seven-fold compared to the same period last year, Patriot Growth (up 16 deals) and Keystone Agency Partners (up 10 deals), which both tripled their deal total.
Meanwhile, some active buyers dialed back activity, including AssuredPartners at seven (down 68%), World Insurance at nine (down 36%), Hilb at seven (down 22%), and BroadStreet at 16 (down 16%).
A total of 83% of the businesses sold were in traditional retail insurance distribution. Property-casualty sellers accounted for 253 transactions (59% of the total) year-to-date 2022 while benefits agencies sales totaled 53 (12%).
“Tallies for deals so far in 2022 and conversations with buyers indicate that the second half of the year should be robust," Germundson added. “The final tally may not be as high as 2021, but it could prove to be close."
Will Jones is IA editor-in-chief.