Insurance Agency Mergers and Acquisitions Dip 10% in 2024

Deals for property & casualty and benefits brokers in US and Canada reverted to pre-boom levels while three mega-deals made news, OPTIS Partners reports

CHICAGO, IL / ACCESS Newswire / January 22, 2025 /There were 750 announced insurance agency mergers and acquisitions in 2024, down 10% from 833 reported in 2023, according to OPTIS Partners.

Deals in the second half of 2024 were up 21% over the first half of 2024 but down 8% over the second half of 2023. The 199 deals during the fourth quarter of 2024 were 6% lower than the prior quarter and 16% lower than during the same period in 2023.

"There is a general pullback in the pace of acquisition for more than half of the historically most-active buyers, yet firms like Broadstreet Partners and ALKEME continue to pick up their pace, and others like PCF and Relation are moving again after brief slowdowns," said Steve Germundson, partner at OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.

Three giant deals made big news last year, he said. In April AON purchased NFP ($2.2 billion in revenue and #13 on the Business Insurance Top 100 in 2022) for $13 billion. In November Marsh McLennan Agencies closed on McGriff Insurance Services ($1.3 billion in revenue and as a stand-alone operation McGriff would have ranked #14 on the Business Insurance list) for $7.75 billion; this deal did not include the CRC wholesale and other business units owned by TIH Insurance Holdings. In December Arthur J. Gallagher announced an agreement to acquire AssuredPartners ($2.9 billion in revenue and #11 on the Business Insurance list) for $13.45 billion, which is expected to close in the first quarter of 2025.

In December, Arthur J. Gallagher announced an agreement to acquire AssuredPartners (#11 on the Business Insurance list) for $13.45 billion ($2.9 billion in revenue). It is expected to close in the first quarter of 2025.

Report tracks trends among four types of buyers and sellers

OPTIS Partners tracks buyers by four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others.

Sellers are classified as U.S. and Canadian property/casualty and employee benefits brokerages, third-party administrators and related managing general agent operations. Sellers also include agencies solely focused on life insurance, investment or financial management, consulting and other businesses connected to insurance distribution.

Broadstreet and Hub lead buyers

The number of unique buyers in 2024 was 98, which is 20% lower than the 122 reported for 2023 and 45% lower than the 177 specific buyers during the peak in 2017. During this latter period, the number of private equity-backed buyers that reported a deal grew from 30 in 2017 to 40 in 2024.

The biggest jump in deal volume was made by Broadstreet Partners, which led all buyers with 90 closed transactions, a 53% year-over-year increase and nearly twice the pace of its previous 5-year average.

Hub International followed with 61 completed transactions (down from 66 in 2023) and Inszone Insurance Services with 48 deals (up from 46 in 2023). Other top buyers included Patriot Growth Insurance Services with 35 acquisitions (36 in 2023), Arthur J. Gallagher with 31 acquisitions (31 in 2023), and Leavitt Group with 30 acquisitions (34 in 2023).

Eleven firms did 20 or more deals in 2024 compared to 13 in 2023 and 17 in 2022. Out of these 11, only four did more deals than in the prior year. In addition to Broadstreet Partners, ALKEME picked up the pace the most with year-over-year increases of 11 deals, respectively. World Insurance Associates and Acrisure declined the most, by 20 and 12 deals, respectively.

Private-equity buyers still dominate

While private-equity-backed buyers have led the charge in deal activity with 72% of the transactions in 2024, this group consistently accounted for 69%-75% of the transactions in each of the last seven years. Transactions led by privately owned firms declined from an all-time high in 2023 at over 22% of the total to 17% in 2024.

The most-active privately owned buyers in 2024 were Leavitt Group at 30 transactions (down from 34 but 50% above their 5-year average), TrueNorth Companies at 11 (similar to historical activity), and Heffernan Insurance Brokers at 9 (down from 12).

Marsh McLennan tripled its deal activity in 2024 with 12 acquisitions, and Arthur J. Gallagher was the only publicly traded broker that did more than 15 deals in the U.S. and Canada with 31 in 2024, down from 36 in 2023. AON, previously not considered an active acquirer, will become more acquisitive with its NFP acquisition in early 2024. NFP has a history of being active in M&A, and when we add NFP deals to AON 's totals, AON is credited with 15 deals in 2024.

P&C sellers get 64% of deals

P&C sellers accounted for 477 of the total 750 transactions (64%), while 102 employee benefits specialists were sold (14%). Both were similar to their share of the totals in recent years.

Buyers continue to pay top dollar for good agencies

"The M&A market is in a fairly steady state regarding both the number of transactions in the year and the pace of them throughout the year. This is the second consecutive year in which there was no mad dash to closing a large number of deals at year-end," said Tim Cunningham, managing partner of OPTIS Partners.

"We think there could be some more large deals in the next 12-24 months, though likely not of the magnitude of these three. Nonetheless, the chase for scale continues, and this should buoy seller valuations, especially for the better firms, absent a major change in the underlying economy or the insurance marketplace," he said.

The full report can be read at: https://optisins.com/wp/2025/01/2024-ma-report/.

About OPTIS Partners

Focused exclusively on the insurance-distribution marketplace, Chicago-based OPTIS Partners (www.optisins.com) offers merger & acquisition representation for buyers and sellers, including due-diligence reviews. It provides appraisals of fair market value; financial performance review, including trend analysis and internal controls; and ownership transition and perpetuation planning.

Contact: Steve Germundson, OPTIS Partners, germundson@optisins.com 612-758-0598

Tim Cunningham, OPTIS Partners, cunningham@optisins.com, 312-235-0081

Dan Menzer, OPTIS Partners, menzer@optisins.com, 630-520-0490

SOURCE:OPTIS Partners

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