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Commercial insurance brokerage mergers and acquisitions have increased 3% year to date compared with 2021, according to a report Wednesday from Sica Fletcher LLC.
The Amityville, New York-based financial advisory firm uses self-reported data from 18 agent and broker acquirers, which accounted for 70% of all deal activity in the first three quarters of 2022, 487 of a total of 696 announced transactions.
Through September 2022, this group acquired 487 agents and brokers, the report said. Third-quarter deal volume was slower than last year at 193 compared with 229 for the same period in 2021.
While the number of deals has increased, average deal sizes are down through September 2022, with the average size of agency acquired at $3.18 million, against $4.39 million through September 2021, data showed.
The deals total $1.5 billion in acquired revenue through the third-quarter 2022. Some 92% of reported transactions were by private-equity-backed firms through September 2022, “a trend that has increased year-over-year since 2017,” a statement issued with the report said.
The most acquisitive member of the group was PCF Insurance Services Inc. with 83 deals, followed by Acrisure LLC with 76 and Hub International Ltd. with 54, report data showed.
The third-quarter increase was unexpected given current macroeconomic challenges, according to managing partner Mike Fletcher. “It's surprising to see Q3’s M&A activity as active as it was a year ago given borrowing costs for acquirers having nearly doubled since the beginning of this year,” he said in the statement.