Deals for property & casualty and benefits brokers in US and Canada dip 12% in first quarter, OPTIS Partners reports
CHICAGO, IL / ACCESSWIRE / April 7, 2020 / There were 137 announced insurance agency mergers and acquisitions during the first quarter of 2020, down from 155 in 2019, according to OPTIS Partners' M&A database. It was the lowest first quarter total since 2016.
The decline may just reflect a slight aberration in the timing of deal closings, or it may reflect the beginning of the impact of the COVID-19 pandemic, OPTIS Partners said.
The data covers U.S. and Canadian agencies selling primarily property-and-casualty insurance, agencies selling both P&C and employee benefits, and those selling only employee benefits.
"Buyers continued to push their focus and pricing during the quarter until this pandemic started to hit home," said Timothy J. Cunningham, managing partner of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.
Activity by Buyer and Seller Types
The report breaks down buyers into four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others.
Acrisure led all buyers with 18 transactions in the first quarter, one more than in 2019. Other top buyers were Broadstreet Partners with 17 deals, Hub International (12 deals), Assured Partners (8), and The Hilb Group (6). The private equity-backed/hybrid group of buyers maintained their dominance in the buying spree with over 60% of all transactions for the quarter. But that's their lowest share since early 2017.
P&C sellers accounted for 64 transactions (47%), with benefits agencies and P&C/benefits agencies both at about 20% of the total.
"Until there is some degree of stabilization from the pandemic, M&A activity will be significantly impacted as so much of it is based on face-to-face interactions between buyers and sellers," said Steve Germundson, a partner with the firm. Additionally, there are the unknown financial implications of the shelter-in-place orders.
However, assuming the underlying interest in acquisitions remains in place, in particular by private equity-backed buyers and their backers, buyers will likely come back into the marketplace once there is some clarity about the pandemic, he said.
The full report can be read at http://optisins.com/wp/2020/04/march-2020-ma-report/.
OPTIS Partners was ranked in the top five most active agent-broker M&A advisory firms for 2014 - 2019 by S&P Global Market Intelligence.
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: Tim Cunningham, OPTIS Partners, cunningham@optisins.com, 312-235-0081
Dan Menzer, OPTIS Partners, menzer@optisins.com, 630-520-0490
Steve Germundson, OPTIS Partners, germundson@optisins.com 612-758-0598
Henry Stimpson, Stimpson Communications, 508-647-0705 Henry@StimpsonCommunications.com
SOURCE: OPTIS Partners
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https://www.accesswire.com/584095/Insurance-Agency-Mergers-and-Acquisitions-Slow-in-2020
