By Tim Cunningham and Dan Menzer

2007 and 2008 were banner years in the agency-brokerage merger and acquisition market, with more deals at the largest aggregate value than at any time in history. But everything began to change at the end of 2008: the economy entered the most severe recession since the Great Depression; the stock market had crashed and the global economy was in shambles. To add to the pain, the insurance market remained soft, with the possibility the economic turmoil would exacerbate or prolong the soft market in a "perfect storm" scenario.

In spite of this, however, the agency-brokerage business has been, is and will remain attractive to buyers, as its cash flow is reasonably predictable and it is not overly capital intensive. However, along with the perfect storm events, the need to preserve capital or the inability to raise capital has created the current "dead calm" environment. Many of the active players on the M&A scene have grown cautious and conservative due to the inability to predict when any semblance of economic recovery and market firming will occur. A no call may be the best call.

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