2018 saw record number of insurance mergers and acquisitions
Published: January 30, 2019
Updated: February 28, 2019
Author: Luke Jones
CATEGORY: Industry News
2018 was a record-breaking year in the broker network as more mergers and acquisitions happened amongst insurance brokers than any other year. M&A advisory company OPTIS Partners released the information based on its own database records.
The firm logged 626 mergers and acquisitions across the United States and Canada during 2018. Breaking records, companies really started moving in the latter half of the year, with 330 deals made during the last six months and 148 in the fourth quarter alone. In comparison, 2017 saw 611 M&A transactions, which incidentally was also a record at the time.
“The M&A market for insurance agents and brokers continues to surprise and exceed expectations,” said Timothy J. Cunningham, managing director of OPTIS. “There are no signs of anything changing in the near term, either.”
In a report detailing its findings, OPTIS says it looked at companies selling property and casualty insurance. 424 mergers and acquisitions were made by private equity and hybrid buyers, a 68% of the M&A market in 2018.
“The concentration of PE/hybrid buyers has grown steadily since we began tracking deals in 2008, when only 21% of the transactions involved private equity buyers,” Cunningham said.
Acrisure was the leading deal maker through last year, making 101 acquisitions to significantly expand its portfolio. HUB International followed with 58 and then AssuredPartners (37), Gallagher (36), and Broadstreet Partners (34). Gallagher is the only publicly owned company in the list of leading M&A movers.
The company accounted for around a third of all transactions made by private companies (107), a decrease from 137 year-on-year.
In terms of selling, it seems P&C agencies were most willing to offload in 2018, with that group accounting for 55% of deals (345). According to OPTIS, employee benefits brokers were involved in 146 sales, or 23%.
“The actual number of agency acquisitions was far greater than the number reported, as many buyers and sellers do not report transactions, and some acquirers do not report small transaction,” Cunningham said.