Broker M&A deals hit new record in 2020

Mergers and acquisitions among insurance brokerages accelerated in the fourth quarter of 2020, capping a record-setting year, according to data from Optis Partners LLC.

There were 290 fourth-quarter transactions involving U.S. and Canadian brokerages, third-party administrators and related managing general agent operations, the Chicago-based investment banking and consulting firm said in a report Tuesday. That compared with 173 in the same period in 2019.

For the full year, there were 774 transactions, a record high and a 20% increase over 2019.

Grand Rapids, Michigan-based Acrisure LLC again reported the most deals, closing 108 in 2020, compared with 98 in 2019, Optis said. Chicago-based Hub International Ltd. was the second most active buyer, closing 64 transactions, up from 52 in 2019.

Of the companies sold in 2020, 397 were property/casualty brokers, 159 specialized in employee benefits, 128 handled property/casualty and employee benefits, and 90 were categorized as other.

The biggest brokerage sold in 2020 was Assurance Holdings Inc., which Marsh & McLennan Agency LLC, a unit of Marsh LLC, bought in April. Assurance previously ranked 35th in Business Insurance’s ranking of the largest brokers of U.S. business.

Market sources indicate that 2021 is also likely to be an active year for brokerage M&As, the Optis report said.

A full analysis of the Optis report will appear in the February issue of Business Insurance.