Mergers and acquisitions among insurance agents and brokers fell to 987 in 2022, down 8% from 2021, as increases in borrowing costs and uncertainty over the economy made agency buyers more cautious, according to a report issued Tuesday by Optis Partners LLC.

The Chicago-based M&A-advisory company said deals in the first half were 23% higher than the prior-year period, but deals in the second half fell 25% from the 2021 period.

The company tracks announced deals by U.S. and Canadian property/casualty and employee benefits brokerages, third-party administrators and related managing general agent operations, and agencies focused on life insurance and related financial services.

Excluding the life insurance agencies, the decline in deals was more dramatic, falling 17% to 885.

The higher M&A activity in the first half of 2022 was driven by a built-up inventory of deals yet to be completed and still-favorable economic conditions, said Steve Germundson, a partner at Optis Partners.

“As soon as the third quarter began and deal inventories fell, the impact of rising costs of capital was felt and the flow slowed. Interestingly, the deal count in each of the first six months of 2022 was higher than the same month in the previous year, and each of the last six months was lower,” he said in a statement.

Acrisure LLC remained the most active buyer in 2022 with 107 transactions, but that was down 12% from 2021, although 3% higher than its five-year average, the report said.

PCF Insurance Services was the second most active buyer with 71 deals in 2022, down 28.3% from 2021; Hub International Ltd. was third with 70 deals, up 12.9%; then High Street Insurance Partners Inc. with 44 deals, down 38%; and Inszone Insurance Services Inc. with 42 deals, a multiple of 12 deals it completed in 2021.

Private equity-backed brokers or companies with significant outside acquisition support was the most active group of buyers, accounting for about 75% of the total.

Of the privately held brokers, the most active buyer was Liberty Co. Insurance Brokers Inc., which announced 33 deals, more than three times the number of deals it completed in 2021.

Prices of agencies also fell in 2022, but they remain higher than historical averages, said Tim Cunningham, managing partner of Optis Partners.

“Valuations for all but the best may have moderated, but they are still well above values from just a few years ago,” he said.