Reagan Consulting tracks mergers and acquisitions in insurance. A recent report from the company says M&A activity will be intense in insurance through the rest of the year.
This despite huge economic challenges facing the country.
“There are still a significant number of well-capitalized buyers in the market anxious to do deals,” the Reagan report said. “As a result, we expect robust deal activity to continue in 2023 and accelerate from the 99 transactions completed in the first quarter.”
M&A activity in the first quarter of this year was down 26.7% from the 135 in 2021. It was down 43% from the 174 in the fourth quarter of 2022.
The average valuation in the first quarter hit 12.5 times earnings before interest, taxes, depreciation and amortization for a brokerage earning $3 million to $5 million a year. Even better, privately held brokers had organic growth of 11.1% in the first quarter. That’s the best growth rate since Reagan Consulting started doing these surveys.
Public brokers had first quarter organic growth of 9.7%.
The best financial news came in commercial P&C lines. They had first quarter organic growth of 11.7%. That’s the second highest rate in the history of the survey. The hard market, inflation and an economy that’s humming along are the reasons.
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