M&A Transactions — 2023 1st Quarter Lowest Since 2019

The recession seems to be impacting insurance mergers and acquisitions as much as it has impacted other businesses and prices. OPTIS Partners tracks such things and says the first quarter of 2023 saw the fewest number since 2019.

The 158 transactions is a 17% drop from the 190 in the first quarter of 2022. It’s also 7% lower than the five-year average.

OPTIS tracks four groups of buyers:

  • Private equity backed/hybrid brokers
  • Privately held brokers
  • Publicly held brokers
  • Others

In the first quarter of 2023, private equity and hybrid brokers dominated with 74% of all transactions. Private party deals accounted for 17% of the total.

Here are the top buyers of the 1st quarter of 2023:

  • BroadStreet Partners – 14 deals
  • Inszone Insurance Services and Hub International – 10 deals each
  • World Insurance Associates – 9 deals
  • Risk Strategies Company – 8 deals
  • Keystone Agency Partners and Arthur J. Gallagher – 7 deals each
  • Choice Financial Group and Acrisure – 6 deals each
  • NFP – 5 deals

OPTIS managing partner, Timothy Cunningham said some buyers who’ve been active for years have taken themselves out of the merger and acquisition picture. “Whether by choice or by necessity, some buyers are standing on the sidelines for the time being. But other well-capitalized firms are still very much in the hunt for M&A,” he said.

OPTIS Partners’ partner, Steve Germundson said these are the top sellers by category:

  • Property & casualty — 87 of the transactions and 55% of the total
  • P&C/benefits agencies – 34 deals and 22% of the total
  • Benefits agencies – 13 transactions and 8% of the total
  • All other – 24 and 15% of the total

“We’re experiencing the other side of a nine-quarter deal bubble that began in Q4 ’20,”Germundson said. “The current deal environment may have wavered some with economic changes and looks anemic compared to the bubble years, but there is plenty of evidence to suggest that M&A in the insurance distribution sector will continue at a healthy pace.”

Source link: Insurance Journal — https://bit.ly/3VmP29a

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