As of the end of September 2024, the total number of insurance agency mergers and acquisitions (M&A) has decreased by 10% compared to the same period in 2023, according to OPTIS Partners, a firm specializing in investment banking and financial consulting. Here are the key details regarding the M&A landscape in the insurance sector:
Key Statistics
A total of 535 announced insurance agency mergers and acquisitions were recorded by OPTIS Partners for the first nine months of 2024, down from 594 during the same period in 2023.
The deal count for Q1-Q3 2024 was 13% below the average of the last five years.
Quarterly Trends
Notably, the third quarter of 2024 saw a 14% increase in deal count compared to the second quarter, with 198 transactions announced. This marks a positive shift after six consecutive quarters of declining deal counts.
Market Outlook
Steve Germundson, a partner at OPTIS, commented on the recent uptick, suggesting that while two quarters of increasing deal counts do not establish a definitive trend, it may indicate that the market is at or near the bottom of the deal-flow trough.OPTIS Partners anticipates significant transactions in the coming 12-15 months, citing notable deals such as:
Marsh & McLennan’s acquisition of McGriff Insurance Services for $7.75 billion.
IMA Financial’s acquisition of Wallace Welch & Willingham.
Leading Buyers: BroadStreet Partners led the market with 68 transactions year-to-date, reflecting a 50% increase compared to the same period last year.
Other active players included
- Hub International with 39 deals.
- Inszone with 38 deals.
- Patriot Growth, which recorded 32 transactions, nearly doubling its previous year’s total.
Buyer Composition
Of the 87 different buyers identified in the first nine months of 2024, 25 were making their first acquisition.
Approximately 70 buyers conducted fewer than 10 transactions during this period.
Private equity-backed and hybrid buyers accounted for 73% of all acquisitions in the last 12 months, while publicly held brokers and other entities represented 10% of the deals.
Conclusion
The insurance agency M&A landscape has experienced a decline in activity compared to the previous year, but recent quarterly increases suggest a potential recovery. With a significant number of transactions anticipated in the near future, particularly from private equity-backed buyers, the market may be poised for renewed growth. The strong performance of leading firms like BroadStreet Partners and the notable acquisitions by major players underscore the dynamic nature of the industry.
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