Insurance agents, brokers' 2019 M&A activity edged past 2018's record

The OPTIS database logged a record 649 deals in the United States and Canada in 2019, up from 643 M&A deals in 2018.

“Agency valuations continue to climb based in part on the continued expansion of interest from the PE/hybrid group,” Timothy J. Cunningham, managing director of OPTIS, said in a statement. “There’s nothing on the horizon to indicate any change should be expected in the current state of agency M&A.” (Credit: designer491/Shutterstock)

Mergers and acquisitions (M&A) of insurance agents and brokers reached a new high in 2019, edging past 2018, previously the most active year, according to OPTIS Partners’ annual report. The OPTIS database logged a record 649 deals in the United States and Canada in 2019, up from 643 M&A deals in 2018.

Of all the deals reached in 2019, 320 came in the second half of the year, and 149 came during the fourth quarter.

The top 10 buyers in 2019, listed below, accounted for 58% of transactions made, a slight decrease from 61% in 2018:

Private equity-backed/hybrid (PE/hybrid) buyers accounted for 448 transactions, up from 434 in 2018. Privately owned firms completed 118 transactions in 2019, up from 114 in 2018. Notably, the number of unique buyers dropped to 131 in 2019 from 153 last year, while the number of PE/hybrid buyers has increased to 34 from 26 during the same period.

“Agency valuations continue to climb based in part on the continued expansion of interest from the PE/hybrid group,” Timothy J. Cunningham, managing director of OPTIS, said in a statement. “There’s nothing on the horizon to indicate any change should be expected in the current state of agency M&A.”

By seller type, property & casualty-focused agencies accounted for 329 of the 2019 transactions. Employee benefits accounted for 162 transactions.

“Despite the slight reduction in the number of deals completed during the latter half of 2019, we believe the environment remains very strong for agencies looking to sell,” Daniel P. Menzer, partner at OPTIS, said in a statement. “With the multiples being offered, few sellers should have any difficulty achieving the financial returns they are looking for.”

The full report, 2019 Agent & BRoker Mergers & Acquisitions Update, can be found on OPTIS Partners’s website.

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