Insurance distribution M&A “highly active” in Q3: Optis Partners

Hub International and Gallagher are two of the top five buyers for the current year

The third quarter (Q3) of 2017 saw 132 reported sales in the insurance distribution sector, continuing the “highly active pace” of mergers and acquisitions (M&A) this year, states a recently published report by Optis Partners.

Companies that focus on providing P&C insurance dominated those transactions with 69 of the 132 occurring in that space while P&C companies who also provide group benefits coverage accounted for 15 transactions.

Related: Hub acquires Integro Canada

Optis’ quarterly report studies M&A transactions in the insurance distribution sector in the U.S. and Canada. These agencies and brokers provide P&C insurance, employee benefits, or any combination thereof.

Q3 2017 accounts for the third-highest of quarterly M&A transactions in the space since 2008. The most dramatic number of transactions occurred in Q1 of this year when 186 transactions took place.

The top five buyers for the first nine months of 2017 are Acrisure, with 71 transactions; Hub International, with 36 transactions; Alera group, with 29 transactions; BroadStreet Partners, with 25 transactions; and Gallagher with 24 transactions.

Related: Brokers’ top five reads in September

The current year “will be another record-setting year for M&A activity in the insurance-broker space, fueled by aggressive buyer valuations, in particular from [private equity]-backed buyer group[s], and the plentiful supply of agency principals needing to complete their exit strategies,” states the report.

“While there remain a number of uncertainties in the economic and geo-political marketplaces, including…the impact of the recent natural disasters on insurance capital and ultimately premium levels, the market for insurance agencies remains a ‘seller’s market,’” it continues.

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Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.