Offers for property & casualty and advantages brokers in United States and Canada dip 20% in first half, OPTIS Companions experiences
Insurance coverage company mergers and acquisitions dropped by 20% through the first half of 2024, in line with OPTIS Companions’ newest quarterly report. In line with the corporate’s database, there have been 300 introduced insurance coverage company mergers and acquisitions within the first half of 2024, down from 385 in the identical interval in 2023.
As for 2024, there have been 146 offers introduced nationally in Q2-2024 down from the 154 introduced within the earlier quarter. 12 months-over-year, this quantity is a 26% lower as in comparison with Q3-2023.
“The present price of deal-making is like that of 2019 and 2020,” mentioned Steve Germundson, a associate at OPTIS Companions, an funding banking and monetary consulting agency specializing within the insurance industry.
It was the bottom first-half whole in 4 years and 26% beneath the earlier five-year first-half common. For six consecutive quarters, the deal depend has fallen beneath the long-term development line.
OPTIS managing associate Timothy J. Cunningham added, “Whereas some previously very lively patrons grew to become comparatively inactive, it seems that a couple of are choosing up the tempo barely. Others that didn’t decelerate within the latest financial downturn certainly have elevated their shopping for tempo.”
BroadStreet Leads Patrons
Amongst patrons, BroadStreet Companions recorded probably the most transactions within the first half of 2024 with 46, 77% greater than in the identical interval final 12 months. Inszone and Hub adopted with 27 and 26 offers, respectively. Whereas Hub’s tempo of deal-making is much like prior years, Inszone’s tempo has elevated every year since 2021.
The highest 13 patrons (high 10 and ties) accounted for 193 offers or 64% of the entire. All had been personal equity-backed companies besides Leavitt Group (personal) and Arthur J. Gallagher (publicly traded).
There have been 62 distinctive patrons of insurance-distribution-related companies by means of the primary half of 2024, 41 of which did fewer than 5 transactions and 26 of which did only one. Some 14 of those companies introduced their first acquisition.
The report breaks down American and Canadian patrons into 4 teams: personal equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others. The personal equity-backed/hybrid group of patrons maintained their dominance within the shopping for spree with 71% of all transactions for the half, whereas transactions between personal events accounted for 20%. Publicly held brokers and all others accounted for simply 7% of offers.
High 10 Acquirers (together with ties) YTD in 2024
| Purchaser | 2019 | 2020 | 2021 | 2022 | 2023 | H1-2024 |
|---|---|---|---|---|---|---|
| BroadStreet Companions | 34 | 58 | 45 | 35 | 59 | 46 |
| Inszone Insurance coverage Companies | 6 | 10 | 12 | 42 | 45 | 27 |
| Hub Worldwide | 52 | 65 | 62 | 70 | 65 | 26 |
| Keystone Company Companions | 0 | 7 | 22 | 29 | 29 | 14 |
| Leavitt Group | 10 | 12 | 24 | 20 | 34 | 13 |
| Gallagher | 34 | 23 | 25 | 26 | 36 | 13 |
| One Digital | 17 | 32 | 21 | 21 | 19 | 9 |
| ALKEME | 0 | 0 | 7 | 11 | 12 | 9 |
| PCF Insurance coverage | 4 | 36 | 99 | 71 | 2 | 8 |
| Acrisure | 98 | 108 | 122 | 107 | 36 | 7 |
| Threat Methods Firm | 22 | 18 | 24 | 24 | 29 | 7 |
| Alliant Insurance coverage Companies | 7 | 6 | 22 | 10 | 18 | 7 |
| Higginbotham & Assoc | 5 | 9 | 6 | 13 | 9 | 7 |
| Sub-total | 289 | 384 | 491 | 479 | 393 | 193 |
| All Others | 369 | 421 | 617 | 552 | 431 | 107 |
| Totals for 12 months | 658 | 805 | 1,108 | 1,031 | 824 | 300 |
Important Dealer Transactions in 2023
One other attention-grabbing tidbit from the report highlights the three largest dealer transactions in 2023. They’re as follows:
| Vendor | Purchaser | Estimate 2021 Income | Date |
|---|---|---|---|
| NFP Company (New York, NY) |
AON | $2 billion | April 2024 |
| Truist Insurance coverage Holdings (Charlotte, NC) |
Stone Level Capital/ Clayton Dubilier & Rice/ Others |
$3.4 billion | Might 2024 |
| Fisher Brown Bottrell (Jackson, MS) |
Marsh McLennan Company | $58 million | June 2024 |
P&C Businesses Dominate Sellers
The report covers 4 varieties of sellers: businesses property-and-casualty insurance coverage businesses, businesses providing each P&C and worker advantages, worker advantages businesses, and all different sellers (life/monetary companies, consulting and different companies related to insurance coverage distribution).
P&C sellers accounted for 198 transactions (66% of the entire). Advantages businesses gross sales totaled 34 (11%), and there have been 33 gross sales of P&C/advantages businesses (11%). All different sellers accounted for 35 gross sales (12%).
Will M&A decline go deeper?
“We might be solely initially of an extended slide, however it appears unlikely,” Germundson mentioned. “A plethora of patrons remains to be seeking to make investments capital, and there are nonetheless a strong variety of unbiased businesses unable to internally perpetuate their possession. So we might seemingly be approaching a ‘regular’ stage of deal-making, much like what we noticed round 2017-2019.
“If inflation declines and the Fed posts price cuts between now and the tip of the 12 months, patrons could turn out to be extra lively. This market remains to be supply-side pushed.”
Cunningham added: “It’s fairly attention-grabbing that there are a number of brokers overtly discussing their intentions on going public in 2024 or 2025, one thing that hasn’t been an element, aside from Baldwin Threat, in a few years. The market is all the time evolving.”
Find out how to Entry the Newest Report
The OPTIS Companions report relies by itself proprietary database monitoring that are probably the most lively acquirers and different introduced transactions. So, whereas it’s a fairly correct indication of deal exercise within the sector, it’s extremely possible that the precise variety of company acquisitions was far larger than the entire quantity reported.
One easy purpose for this result’s that many patrons and sellers don’t report transactions in any respect, whereas different acquirers omit reporting small transactions. Entry to the total report is on the market by clicking the above picture or by clicking this hyperlink: First Half 2024 Merger & Acquisition Update » Optis Partners (optisins.com).
