Broker acquisitions keep rolling in 2022 first half

Mergers and acquisitions involving insurance agents and brokers rose to 427 in the first half of 2022, a 16% increase over the same period last year and 13% above the first-half five-year average, as brokers looked beyond traditional M&A targets, according to a report by Optis Partners LLC.

The second quarter of 2022 was the fourth most active M&A quarter ever, the Chicago-based investment banking and financial consulting firm said.

Much of the growth was driven by acquisitions of companies adjacent to the insurance sector, with 53 deals involving life/financial services, actuarial and human resources consulting, technology, and other companies related to insurance distribution.

The number of deals involving traditional agents and brokers increased 1.5%, said Timothy J. Cunningham, managing partner at Optis.

“There simply aren’t the same number of sellers there as in the past,” he said. “But buyers still have a lot of capital to deploy, and they are finding opportunities to fill other needs in their businesses with firms in this expanded space.”

The most active buyer was PCF Insurance Services, with 48 deals, followed by Acrisure LLC with 43 and Hub International Ltd. with 35.

Buyers that significantly increased their pace of deals included Inszone Insurance Services Inc. with 20 transactions, Patriot Growth Insurance Services LLC with 16 and Keystone Agency Partners LLC with 10.

Private equity-backed brokers, or brokers with a significant amount of private-equity backing, accounted for 73% of transactions, Optis said.