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There were 339 mergers and acquisitions among insurance agents and brokers in the first half of 2021, a 17.7% rise over the same period last year and the highest first-half total on record, according to a report by Optis Partners LLC.
Grand Rapids-based Acrisure LLC was the biggest acquirer with 31 first-half transactions, which was about 20% below its five-year average for the period, followed by PCF Insurance Services in Woodland Hills, California, with 22; AssuredPartners Inc. in Lake Mary, Florida, with 21; Columbus, Ohio-based BroadStreet Partners Inc. with 19; and Hub International Ltd. with 17, Optis said.
The Chicago-based investment banking and consulting firm tracks M&A activity among U.S. and Canadian agents and brokers selling property/casualty insurance, employee benefits coverage or both.
Private equity-backed buyers and buyers with significant outside financial support continued to dominate the brokerage M&A sector accounting for 66% of all first-half deals, slightly below the 2020 first half, followed by 24% by privately held brokers, up from 17% last year, and only 5% by publicly held brokers, which from 10% in the first half of 2020, the report said.
“In some ways the M&A story is repetitive: an increasing number of private equity-backed buyers with access to large amounts of cheap capital continues to fuel the pace of M&A and valuations at all-time highs. A more interesting development is the beginning of a rise in privately-owned agency activity as they now account for a quarter of the deals done,” Dan Menzer, partner at Optis, said in the report.
Property/casualty brokers were involved in 188 or 55% of the transactions.
Mergers and acquisitions in the insurance brokerage sector increased modestly to 754 deals announced in 2020, compared with 744 in 2019, according to a report Wednesday from S&P Inc.