A look at the national rate of M&A acquisitions this quarter courtesy of OPTIS Partners
“132 deals in third quarter push total to 457 for first nine months of 2017. Buyers continue the aggressive valuations of property-casualty and employee benefits agencies, and sellers are responding.”
The continued clip of insurance agency mergers and acquisitions has pushed the total number to 457 for the first nine months of 2017. The number of reported transactions for this 9-month period has already equaled the total number of record transactions from 2015.
“There’s no end in sight to the upward trend. The appetite of buyers is undiminished, as is the supply of agencies for sale,” said Timothy J. Cunningham, managing director of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry. While the second quarter was slower as compared o the first quarter, the third quarter has seen a regained momentum to ensure that 2017 will be on record as one of the best years for M&A activity with respect to insurance agencies.
“It’s absolutely certain 2017 will be another record-setting year for M&A activity,” Cunningham added. “The activity is fueled by aggressive buyer valuations, in particular from private-equity backed buyers who are flush with cash. And there’s a plentiful supply of aging agency principals who need to complete their exit strategies.”
At the close of Q3, OPTIS Partners’ latest quarterly report says that there were 132 reported insurance agency mergers & acquisitions, as compared to 135 in the second quarter and 185 in the first quarter.
The quarterly report from OPTIS Partners includes data covering U.S. and Canadian insurance agencies that either sell property & casualty insurance, employee benefits, or both P&C and employee benefits. The report also includes transactions involving wholesalers and managing general agency brokerage businesses.
Who bought what in the first quarter of 2017?
Each quarter, The OPTIS Partners report breaks down insurance agency buyers into six different groups:
- private-equity (PE) backed brokers,
- privately held brokers,
- publicly held brokers,
- Insurance companies, and
- all others.
During the third quarter, as predicted at the start of the year, Privately-held Buyers led in M&A acquisitions, completing a total of 65 deals this quarter. After Privately-held Buyers, PE-backed brokers reported 50 deals in Q3, making them the second largest group of agency buyers this year.
Publicly traded brokers were involved in 10 completed deals, while banks reported six acquisitions this quarter.
Insurance companies/other categories did not report any acquisitions/transactions this quarter, while in the other category, only one transaction was reported.
Who are the top agency buyers?
The following is a list of the top ten buyers according to OPTIS Partners’ data:
Who sold what in the first quarter of 2017?
Predominantly P&C insurance agencies were again the most likely to sell in this quarter, with 69 announced transactions. There were 33 reported Benefits sales, along with another 15 P&C/Benefits sales. The remaining 15 reported transactions belonged to the other category.
Observations on the Massachusetts marketplace
According to OPTIS Partners and Agency Checklists’ records, there were a total of three announced (and one unannounced) mergers and acquisitions in the Commonwealth during Q3 2017.
Unlike the rest of the country, however, the largest buyers of P&C agencies in the Commonwealth continue to be local, privately-held insurance agencies. As a result, while M&A activity remains strong, the majority of the buyers and sellers continue to be connected to the Commonwealth rather than from around the country.
What is happening right here in Massachusetts?
The following are the agency acquisitions that Agency Checklists has tracked and written about so far in 2017.
January 2017 (Q1)
February 2017 (Q1)
March 2017 (Q1)
April 2017 (Q2)
May 2017 (Q2)
June 2017 (Q2)
July 2017 (Q3)
August 2017 (Q3)
One unannounced transaction
September 2017 (Q3)
Our exclusive list of M&A transactions in Massachusetts
Please note that while we try and keep our own data up-to-date as much as possible, we cannot guarantee that we have included every transaction that has taken place in the Commonwealth so far this year.
If you know of an agency that was bought or sold and does not appear on this list, please help us out by letting us know here.