• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Contact Us
  • Sponsor An Email
  • Post A Job
  • Merger & Acquisition Services

Agency Checklists

Massachusetts Insurance News & Job Opportunities

You are here: Home / Insurance News | Massachusetts / Insurance Agencies | Mergers & Acquisitions / 2022 Was An Up & Down Year For Agency Mergers & Acquisitions

2022 Was An Up & Down Year For Agency Mergers & Acquisitions

January 31, 2023 by AC Editor

Deals Were Down 25% in the second half of 2022 as compared to in 2021

“2022 was a tale of two halves,” said Steve Germundson, partner at OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry. “The robust first half was driven by a built-up inventory of deals yet to be completed and still favorable economic conditions. The buying spree continued as there were 23% more deals done than in the same period in the prior year.

2022 Was An Up Down Year For Agency Mergers Acquisitions
Source OPTIS Partners

In determining what factors were behind such a dramatic drop in the latter half of the year, the firm hypothesized that a significant rise in interest rates and economic uncertainty may be forcing a few buyers to pull back and causing nearly all buyers to proceed more cautiously.

“However, as soon as the third quarter began and deal inventories fell, the impact of rising costs of capital was felt and the flow slowed. Interestingly, the deal count in each of the first six months of 2022 was higher than the same month in the previous year, and each of the last six months was lower.”

OPTIS Partners’ Report Now Covers Four Types of Sellers & Buyers

As noted in the first quarterly report of the year, OPTIS Partners has expanded its reporting in 2022 to now include mergers & acquisitions of four types of buyers and sellers associated with the insurance distribution system. These four groups include:

  • private equity-backed/hybrid brokers,
  • privately held brokers,
  • publicly held brokers, and
  • all others

The addition of the fourth group allows for the inclusion of business associated with the insurance distribution system such as the life/financial services industry and consulting businesses.

However, OPTIS Partners notes, that “when the newly admitted categories of sellers are excluded, the decline is even more dramatic as the number of transactions declined 17% from 1,066 in 2021 to 885 in 2022.”

A look at how the year progressed…

Overall, OPTIS Partners research calculated that there 987 announced insurance agency mergers and acquisitions in 2022, down 8% from 1,075 reported in 2021.

While deals in the second half of 2022 were up 16% over the first half of 2022, they were down by 25% over the second half of 2021. As for the last quarter of the year, there were 282 deals, 14% higher than in the third quarter of 2022, yet 30% lower than over the same period in 2021.

Typically, the second half of any given year is busier than the first half, in terms of M&A activity, but not in 2022. In addition, the year-over-year decline most likely reflects rising interest rates and economic uncertainty.

Who were the most active acquirers in 2022

There was no material change in the types of buyers driving M&A activity. Private equity-backed/hybrid group of buyers continued to dominate the volume of transactions at approximately 75% of the total.

Acquisitions completed by privately held firms increased somewhat to nearly 17% while publicly traded companies dropped somewhat to 4% of all deals, respectively.

In terms of actual buyers, Acrisure continued to lead all buyers with 107 transactions in 2022, down 12% over its 2021 totals, yet 3% higher than its previous five-year average said OPTIS Partners in its official announcement.

After Acrisure, PCF Insurance followed with 71 completed transactions (down from 99 in 2021). Other top buyers were Hub International with 70 acquisitions (up from 62 in 2021) and High Street Partners with 44 (down from 71 in 2021). Inszone Insurance Services with 42 deals (up from 12 in 2021) rounded out the top five.

Another group of active buyers recorded between 30 and 40 transactions in 2022: World Insurance Associates (39 in 2022 v. 53 in 2021), BroadStreet Partners (35 v. 45), Liberty Company Insurance Brokers (33 v. 10), Assured Partners (33 v. 52), and Alera (30 v. 45).

Out of the 17 firms that did more than 20 deals in 2022 only Hub, Inszone, Liberty Company, and Keystone Agency Partners did more deals than in the prior year. Those among this group of 17 dealmakers that booked the most dramatic decreases were PCF (28 fewer deals), High Street Partners (27 fewer), and AssuredPartners (19 fewer).

The most active privately-owned buyers in 2022 were Liberty Company Insurance Brokers at 33 (up from 10), Westland Insurance Group at 15 (up from 9), and TrueNorth Companies at 10 (up from 4).

Buyers with 20 or more deals in 2022

The following is a table highlighting which companies had the most deals across the country in 2022:

Buyer20182019202020212022
Acrisure10198108122107
PFC Insurance44369971
Hub International5952656270
High Street Partners1397144
Inszone Insurance Services26101242
World Insurance Associates918425339
Broadstreet Partners3434584535
Liberty Company Insurance Brokers1221033
AssuredPartners3844385233
Alera Group2824184530
Keystone Agency Partners0071429
Patriot Growth Insurance Services025213127
The Hilb Group1225222724
Risk Strategies Company1022182423
Gallagher3634232523
OneDigital2717322121
Relation Insurance06113320
Sub-total362414520746671
All Others 281236275329316
Totals for Year6436507951075987
Data courtesy of OPTIS Partners

P&C agencies most often sold

P&C sellers accounted for 557 of the total 978 transactions (56%), similar to their percentage of the totals in recent years.

“The industry seemingly turned on a dime starting July 1st. Deal counts are down, underwriting scrutiny is higher, and valuations for most, except the A-tier sellers, are down some,” said Tim Cunningham, managing partner of OPTIS Partners.

“We are likely at the beginning of a transition period that brings us back to historical norms. Interest rates are higher than they have been in recent memory but are still at or below long-term historical averages. Valuations for all but the best may have moderated, but they are still well above values from just a few years ago. And while deal count has slowed materially, the second half of 2022 was still 19% higher than the previous 5-year average.”

How to access the full report as well as the Q3-2022 Report

The OPTIS Partners report is based on its own proprietary database tracking which are the most active acquirers and other announced transactions. As such, while it is a reasonably accurate indication of deal activity in the sector, it is highly probable that the actual number of agency acquisitions was far greater than the total number reported. One simple reason for this result is that many buyers and sellers do not report transactions at all, while other acquirers omit reporting small transactions. Access the report read by clicking the image below:

Print Friendly, PDF & Email

Filed Under: Insurance Agencies | Mergers & Acquisitions, Latest News Tagged With: Agency Checklists, Insurance Agency Acquisitions Massachusetts, Mass. Insurance News, massachusetts insurance news, Massagent agency sales, New England Insurance News, OPTIS Partners

Primary Sidebar

Sponsored

Sponsored

MA Division of Insurance Announcements

Latest Agency Sales

Salem Five Insurance Acquires Nichols Insurance Agency Inc.

World Picks Up Another Two Agencies in New England

More Agency Sales

Career News

Preferred Mutual Announces Three New Appointments

Benjamin Wichland Joins Optisure Risk Partners

Brooks Tingle Appointed President and CEO of John Hancock in Leadership Succession Plan

Brooks Tingle Appointed President and CEO of John Hancock in Leadership Succession Plan

Insurance Executives Among Honorees of Inaugural Insurtech Hartford’s Industry Influencer Awards

AssuredPartners Announces New Executive Leadership Appointments

AssuredPartners Announces New Executive Leadership Appointments

Risk Strategies Appoints S. Stuart Spector as Chief Operating Officer, National Employee Benefits and related Specialty Group Companies

Arbella Insurance Foundation Appoints Robin Jones as its new Executive Director

Hilb Group Announces Managing Director of Employee Benefits in Rhode Island, Massachusetts, and Connecticut

Danielle Chaplick Joins Risk Strategies Consulting as Managing Director

The Hanover Appoints Kate B. Williams to President of E&S

The Hanover Appoints Kate B. Williams to President of E&S

View More Career News

In Memoriam

In Memoriam: Pauline Stopyra, 1926-2023

In Memoriam: Nancy L. Perocchi, 1937-2022

In Memoriam: Peter J. Nobile, Jr., 1931-2022

CAR News

Tesla Insurance Exceeding Expectations

Bi-Monthly CAR Update: The MA Commercial Auto Insurance Marketplace

Bi-Monthly CAR Update: The MA Private Passenger Auto Insurance Marketplace

View More CAR News

Massachusetts Law Updates

Appeals Court Decision Reopens Door To Lawsuit Against New Bedford-Based Insurance Agency

A New Bedford-based agency may end up having to face a lawsuit it thought it might have avoided.

Understanding The Duty to Defend: Partington Builders v. Nautilus Ins.

Understanding The Duty to Defend: Partington Builders v. Nautilus Ins.

Federal Court Reaffirms Massachusetts Rule Regarding an Insurer’s Duty to Defend

Appeals Court Reins in Superior Court’s Expansion of Risk Management

Court Limits Indemnity Agreements Interpretation and Reverses $237K Legal Fee Award

Insured’s $2 Million Claim For Loss Prevention Costs Scuttled By The Supreme Judicial Court

A look at the Supreme Judicial Court of Massachusetts’ ruling on Ken’s Foods’ common law reimbursement claim.

More Mass. Law Updates

DOI News

Massachusetts Remains The 14th Largest Insurance Marketplace As Ranked By Total Premium Volume

Facts & Figures For New England Insurance Departments & Insurance Producers | 2023

Massachusetts Insurance Commissioner Honored for Exceptional Leadership

DOI: Insurance Companies Must Renew MA Appointments by October 14th

View More DOI News

Insurance Fraud

Temporary Employment Agency Owner Indicted for Tax and Insurance Fraud

Six-Day Jury Trial: Property Owner Not Guilty Of Insurance Arson

65 Months Behind Bars: Recommended Sentence For Advisor’s $1.4 Million Theft From Clients’ Annuities

Walmart Will Pay $500k For Its Failure To Follow Workers’ Comp. Prescription Pricing Procedures

More Insurance Fraud News

Footer

Agency Checklists

Contact us

14 Summer Street
Suite 102
Malden, MA 02148
617-598-3800

Advertise on Agency Checklists

We offer a variety of ways to get help promote your company or product.

Announcements
Email Sponsorships
Partnerships
Custom Collaborations

*Affiliate Disclosure

Please note that any of Agency Checklists’ articles might contain one or more affiliate links. This means that any subsequent purchase resulting from these links may result in a commission for us, but at no additional cost to you. For example, as an Amazon Associate, Agency Checklists earns a commission from all qualifying purchases. By working with affiliates we can continue to keep Agency Checklists subscription free. Thank you for your support.

SEARCH OUR SITE

Explore Our Archives

Copyright © 2023 · Agency Checklists · All rights reserved.

 

Loading Comments...