Deals for property & casualty and benefits brokers in US and Canada dip 14% in first quarter, OPTIS Partners reports
CHICAGO, IL / ACCESSWIRE / April 29, 2022 / There were 149 announced insurance agency mergers and acquisitions during the first quarter of 2022, down 14% from 173 in 2021, according to OPTIS Partners' M&A database.
It was the lowest first-quarter total since 2016 and 7% below the 5-year average.
"The decline is not surprising because the fourth quarter of 2021 was frenetic, with 384 deals. Deal-makers usually take a short-lived breather after busy year-end activities, and seller inventory is shrinking," said Steve Germundson, a partner at OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.
"Many agency owners who had been thinking about selling over the last few years were pushed to act by record valuations and concern over tax increases. While valuations remain very high, the concern over tax increases has abated," said OPTIS managing partner Timothy J. Cunningham.
Tracking Expanded
OPTIS reports have covered three types of sellers: U.S. and Canadian agencies offering primarily property-and-casualty insurance, agencies offering both P&C and employee benefits, and those offering only employee benefits. Because buyers have broadened their acquisition targets, OPTIS for the first time is including all other sellers--life/financial services, consulting, and other businesses associated with insurance distribution.
The report breaks down buyers into four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others.
Acrisure and Hub Lead Buyers
Among buyers, Acrisure and Hub recorded the most transactions in Q1 ‘22, with 14 and 12 respectively, and they at least kept pace with same results in the prior year. At the other end of the spectrum, some buyers that have been very active over the last five years were not in the market. AssuredPartners and Alera announced no transactions in Q1 ‘22, and OneDigital announced just one.
Other top buyers were Inszone Insurance Services (10 deals), High Street Partners (9), Integrity Marketing Group (7), and PCF Insurance (6). The private equity-backed/hybrid group of buyers maintained their dominance in the buying spree with 70% of all transactions for the quarter, while transactions between private parties accounted for 21%.
P&C Agencies Dominate Sellers
P&C sellers accounted for 87 transactions (58% of the total). Benefits agencies sales totaled 11 (7%), and there were 37 sales of P&C/benefits agencies (25%). All other sellers accounted for 14 sales (10%).
"History would tell us that activity in the remainder of 2022 will likely rise. Our conversations with a number of buyers confirm that as many are reporting double-digit numbers of letters of intent in hand going into the Q2," Germundson said.
The full report can be read at https://optisins.com/wp/2022/04/mar-2022-ma-report.
OPTIS Partners was ranked in the top six most active agent-broker M&A advisory firms for 2014 - 2021 by S&P Global Market Intelligence.
Focused exclusively on the insurance-distribution marketplace, Chicago-based OPTIS Partners (www.optisins.com) offers merger & acquisition representation for buyers and sellers, including due-diligence reviews. It provides appraisals of fair market value; financial performance review, including trend analysis and internal controls; and ownership transition and perpetuation planning.
Contact:
Steve Germundson, OPTIS Partners, germundson@optisins.com 612-758-0598
Tim Cunningham, OPTIS Partners, cunningham@optisins.com, 312-235-0081
Dan Menzer, OPTIS Partners, menzer@optisins.com, 630-520-0490
Henry Stimpson, Stimpson Communications, Henry@StimpsonCommunications.com
SOURCE: OPTIS Partners
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