Mergers and acquisitions involving insurance agents and brokers rose to 427 in the first half of 2022, an increase of 16% over the same period last year and 13% above the five-year average for the first half, as brokers looked beyond traditional M&A targets, according to a report from Optis Partners LLC.
The second quarter of 2022 was the fourth most active M&A quarter ever, says the Chicago-based investment banking and financial consulting firm.
A large part of the growth was driven by acquisitions of companies in connection with the insurance sector, with 53 deals involving life / financial services, actuarial and personnel consulting, technology and other companies related to insurance distribution.
The number of deals involving traditional agents and brokers increased by 1.5%, says Timothy J. Cunningham, managing partner at Optis.
“There simply aren’t the same number of sellers there as before,” he said. “But buyers still have a lot of capital to distribute, and they are finding opportunities to fill other needs of their businesses with businesses in this expanded space.”
The most active buyer was PCF Insurance Services, with 48 deals, followed by Acrisure LLC with 43 and Hub International Ltd. with 35.
Buyers who significantly increased their business pace were Inszone Insurance Services Inc. with 20 transactions, Patriot Growth Insurance Services LLC with 16 and Keystone Agency Partners LLC with 10.
Private equity-backed brokers, or brokers with a significant amount of private equity support, accounted for 73% of the transactions, Optis said.