Following a record number of transactions completed in 2020, mergers and acquisitions of insurance brokers deteriorated during the first quarter of 2021, Optis Partners LLC reported on Monday.
Transactions between US and Canadian agents, brokers and related companies fell to 150 in the first quarter of the year, a decrease of almost 50% compared to the same period last year, according to the report from the Chicago-based investment banking and financial consulting firm.
After a sharp increase in transactions in the fourth quarter of 2020, driven by pent Demand for the industry to adapt to the COVID-19 pandemic and concerns about potential capital gains tax increases, "it seems the industry needed a breather" and published the lowest volume of business since the first quarter of 201
Several of the most active acquirers logged under average transaction bills (see chart).
The most active buyer group remained PE hybrid, ie brokers or companies with significant can not stand outside financial support, which accounted for 61% of transactions in the first quarter, the report said.
The largest deal completed during the quarter was Marsh & McLennan Agency LLC's acquisition of PayneWest Insurance Inc., an independent agency with approximately $ 135 annual brokerage revenue and the 33rd largest U.S. business broker, according to Business Insurance's latest ranking .
“Activity for the rest of 2021 is likely to increase, but perhaps not to the 2020 level. 2021, ”says the report.