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Insurance agency merger and acquisition activity hit an all-time high in the first quarter of 2016, Chicago-based Optis Partners L.L.C. said Wednesday, racking up 109 reported transactions in the first three months of the year.
The pace slightly outstripped 107 deals posted in the year-ago period, making it the most active first-quarter total over the past nine years.
Optis reported a record 455 M&A transactions in 2015.
“M&A activity seems to have unstoppable momentum,” Timothy J. Cunningham, Optis' managing director, said in a statement.
The data covers U.S. and Canadian agencies selling primarily property/casualty insurance, agencies selling both property/casualty and employee benefits, and those selling only employee benefits.
The report breaks down buyers into five groups: private-equity backed brokers, privately held brokers, publicly held brokers, banks and all others.
Private equity-backed buyers continued to lead the way with 50 transactions, up 25% from the year-ago period. Top buyers were Acrisure L.L.C. with 13 transactions; AssuredPartners Inc. with 11 transactions; and Hub International Ltd. with eight transactions.
Privately held brokers were the second-largest group, completing 34 deals, down from 41 a year ago. The privately owned brokers were one of the four major buyer groups to announce more transactions in the first quarter of the year than they did in the fourth quarter of 2015. Optis said this is likely due to more emphasis on getting deals closed before the end of the year for the other buyers than for the privately owned group.
Publicly traded brokers completed 10 deals, down from 12 in the prior-year period. Bank acquisitions remained unchanged at seven and transactions by all others numbered eight, up one.
Nearly 30 firms that announced a transaction in the first quarter had not announced any prior deals. However, several active buyers from prior years did not announce any transactions during the first quarter, including NFP Corp., Integro Ltd. and J. Smith Lanier & Co.
“The actual number of sales was undoubtedly greater than the 109 reported during the quarter, since many buyers and sellers do not announce transactions,” Optis partner Daniel P. Menzer said in a statement. “However, because our database tracks a consistent pool of the most active acquirers, it's a reasonably accurate barometer of activity.”
Mergers and acquisitions of insurance agents and brokerages in the United States and Canada set fresh records in 2015 in deals pushed by strong valuations and ongoing private equity interest.