Massachusetts Insurance M&As Very Active In 2014

OPTIS Partners is an investment banking and financial consulting firm for the insurance industry

In its latest 2014 Mergers & Acquisitions update, Chicago-based OPTIS Partners says that 2014 is shaping up to be a banner year for M&A Activity.

According to the report, there have been 110 announced mergers & transactions in both the U.S. and Canada during the first four months of 2014. This is by the strongest showing in any quarter since before 2008. While this year’s buying spree has been conducted by 57 different companies so far, this number in and of itself is similar to the past three years in the first quarter of each year.

From 2008 to 2014

Surveying the trends in Mergers & Acquisitions over the last five years, 2012 was the year with the highest amount of M&A Activity, with approximately 300 transactions taking place during that calendar year. While Mr. Menzer suggests that the changes to the tax law that were to arrive in 2013 precipitated a lot of this activity, the latter part of 2013 also saw an increase in insurance agency and broker sales as well.

While it’s still early and certainly 2012 experienced a significant number of transactions late in the year as everyone tried to beat the tax-change deadline, 2014 could equal the 2012 record-setting year if the marketplace continues to perform for the balance of the year as it has through April,” explained OPTIS Partner’s Dan Menzer. “Buyers continue to be hungry and aggressive for deals and the robust inventory of sellers will likely equal another active M&A year.”

The following chart from the OPTIS Partners report takes a look at the six year trajectory of mergers & acquisitions across the U.S. during this time period.

Who is leading the growth in insurance agency-brokerage activity in 2014

The majority of the most active insurance-agency brokerage buyers are long-standing buyers. Outstripping the competition, however, by almost double  was Hub International which came in at number one completing 40 acquisitions over the past six years. Assured Partners and Gallagher were second and third respectively with 22 and 21 acquisitions each. Of note, both Maine-based Cross Insurance and Massachusetts-based Risk Strategies also were listed on OPTIS Partners’ list of the most active buyers. The following is the complete list compiled by OPTIS Partners.

M&A Activity in Massachusetts 

After reviewing the 2014 report, Agency Checklists contacted OPTIS Partners to find out some more information about M&A Activity for Massachusetts specifically. While Massachusetts has been an active state for mergers and acquisitions in the period between 2008 to 2014, OPTIS Partners’ says that the Commonwealth ranks seventh after Canada in terms of the U.S. states and Canada with those most transactions in this time period. Unsurprisingly, the first three spots were taken by the more populated states of California (1); Texas (2); New York (3); then followed by Florida (4); New Jersey (5); Canada (6) and then Massachusetts (7).

Of note, however, 2014 is already shaping up to be an active year in Massachusetts. The Bay State only logged 7 mergers and acquisitions in 2008 and five each in 2009 and 2010, followed by 10 in 2011, seven in 2012, and 12 in 2013. In 2014 already, however, there has already been 10 completed mergers and acquisitions, with a remaining six months of the calendar year left. As such, if this trend continues, 2014 could be the year in which Massachusetts sees its highest number of mergers and acquisitions since before 2008.

OPTIS Partners’ shared the following list of completed transactions since 2008. It should be noted that while this list is not 100% complete, it is sufficient to predict the trends in M&A Activity for 2014.