Merger and acquisition activity among insurance agents and brokers regained momentum in 2011 with 285 announced transactions.

That is nearly identical to the 290 announced agent-broker M&As in 2008 and an increase of approximately 100 compared with 2009 and 2010 (see related chart).

The perfect storm of events—the collapse of the economy coupled with the prolonged soft property/casualty market—had a profound effect in reducing the number of transactions in 2009 and 2010. The previously active buyer group saw an uncertain landscape and had a need to preserve its capital and other resources while many sellers were reluctant to enter into a transaction in a climate that depressed broker and agent net values.

Despite the overall increase, trends differed among the respective groups buying agents and brokers, such as:

• The private broker buyer group maintained a relatively steady pace year over year and quarter over quarter over the past several years, albeit with some modest pullback in 2009 and 2010 (see chart page 18).

• The public broker group pulled back significantly in 2009 and remained somewhat cautious in early 2010.

• Bank-owned agents or brokers broadly mimicked the public broker group—a major decrease in 2009 and 2010, with a modest uptick in 2011.

• Conversely, private equity-backed firms were very active and picked up the slack in late 2010 and throughout 2011, recording the second-largest number of deals after the private broker group.

Of some note is the meteoric rise of Lake Mary, Fla.-based AssuredPartners Inc., backed by Chicago-based private equity firm GTCR L.L.C. AssuredPartners closed three significant deals in the final four months of 2011, representing approximately $130 million in revenue, and wrapped another deal in January for a total of about $164 million, in the realm of a top 20-size firm.

In 2010, there were four top 100 traditional agency sales in the United States. In 2011, there were eight similar sales. Already through one month of 2012, two large transactions have taken place.

The totals do not include large international transactions or acquisitions of nonbrokerage or non-U.S. sellers. Marsh Inc., through its Marsh & McLennan Agency L.L.C. vehicle, has been the most prevalent buyer with a total of five of the large transactions as they continue to build their middle-market retail platform.

AssuredPartners and Brown & Brown Inc. both have picked up two of these large agents/brokers, while the rest are scattered among other private equity and publicly traded buyers.

Whether this trend continues or buyers slow down to integrate these large acquisitions, only time will tell.

Timothy J. Cunningham is a partner at Chicago-based OPTIS Partners L.L.C., a financial and management consulting firm serving the insurance distribution industry.