Commercial insurance broker mergers and acquisitions are up 3% year-to-date compared to 2021, according to a report Wednesday from Sica Fletcher LLC.
The Amityville, New York-based financial advisory firm uses self-reported data from 18 agent and broker acquirers, which accounted for 70% of all transaction activity in the first three quarters of 2022, 487 of a total of 696 advertised transactions.
By September 2022, this group acquired 487 agents and brokers, the report said. Third quarter deal volume was slower than last year at 193 compared to 229 for the same period in 2021.
While the number of deals has increased, average deals have declined through September 2022, with the average size of the agency acquired at $3.18 million, compared to $4.39 million through September 2021, the data showed.
The deals amount to $1.5 billion in acquired revenue in the third quarter of 2022. About 92% of reported transactions were made by private equity-backed companies through September 2022, “a trend that has increased year-over-year since 2017,” a statement issued with the report said.
The most acquired member of the group was PCF Insurance Services Inc. with 83 deals, followed by Acrisure LLC with 76 and Hub International Ltd. with 54, report data showed.
The increase in the third quarter was unexpected given current macroeconomic challenges, according to managing partner Mike Fletcher. “It is surprising to see Q3 M&A activity as active as a year ago given that borrowing costs for acquirers have nearly doubled since the start of this year,” he said in the statement.