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Brokerage M&As declined from previous peak



The number of mergers and acquisitions involving insurance agents and brokers fell to 555 in the first nine months of 2022, down 14% from the record level of deals in the same period last year, according to a report published Monday.

The report by Chicago-based M&A advisory firm Optis Partners LLC said the drop reflected a return to “normal” after an acceleration in brokerage M&A last year when many owners sold their agencies for fear of a potential increase in capital gains taxes.

“This return to a ‘normal’ number of deals is to be expected given the increase in deals last year along with the fact that many of the agency owners who were considering whether or not to sell pulled the trigger in recent years. Inventory has shrunk, said Dan Menzer, partner at Optis, in a statement accompanying the report.

Rising interest rates may limit some buyers in the future, but so far they are not affecting the prices paid to acquire companies in what remains a competitive environment for business.

“The increase in the cost of capital should work to reduce values, but the ever-growing number of buyers appears to be supporting them,” Tim Cunningham, managing partner at Optis, said in the statement.

Optis tracks M&A activity involving US and Canadian property/casualty and employee benefits brokers and third-party administrators. In 2022, it began tracking life insurance and financial services consultants as well, which would take the total number of deals so far this year to 627.

Including all types of companies, Acrisure LLC was the most active buyer with 80 transactions in the first three quarters. PCF Insurance Services was second most active with 56 deals; Hub International Ltd. was third with 50 deals; High Street Insurance Partners Inc. was fourth with 30; and Inszone Insurance Services Inc. was fifth with 23.

Key deals announced in the third quarter include: IMA Financial Group Inc.’s purchase of York International Agency LLC; Truist Insurance Holdings Inc.’s acquisition of BenefitMall Inc. and Arthur J. Gallagher & Co.’s purchase of M&T Insurance Agency Inc., the report said.


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