Broker M&A deals continue at record pace

Insurance broker mergers and acquisitions continued their active pace during the third quarter, Optis Partners L.L.C. said in a report Friday, racking up 132 reported sales and posting the third highest quarterly total behind the first and second quarters of 2017.

The 457 transactions reported through the first nine months of 2017 is equal to the previous annual record from 2015, said the Chicago-based investment banking and financial consulting firm that serves the insurance distribution sector.

According to the report, there’s “no end in sight of the buy-side appetite or sell-side supply of insurance broker acquisition activity.”

Optis said the record-setting pace is fueled by aggressive buyer valuations – in particular from private equity-backed firms, which accounted for 50 deals in the third-quarter – and the plentiful supply of agency principals needing to complete their exit strategies.

The top five individual buyers for the first nine months of 2017, according to the report, were Acrisure L.L.C. with 71 deals, Hub International Ltd. with 36, Alera Group with 29, BroadStreet Partners with 25 and Arthur J. Gallagher & Co. with 24 deals so far this year.

“While there remain a number of uncertainties in the economic and geopolitical marketplaces,” the report said, “including the on-going battles with (Affordable Care Act), and the impact of the recent natural disasters on insurance capital and ultimately premium levels, the market for insurance agencies remains a seller’s market,” report said.