North American broker M&As slow in first quarter to Covid-19 levels

Mergers and acquisitions among North American insurance brokers and agents fell 18% in the first quarter, falling to the lowest level of deals since the beginning of the Covid-19 lockdowns in 2020, according to a report by Optis Partners.

A drop-off in deals by two of the biggest acquirers over the past several years – Acrisure and PCF Insurance Services – accounted for much of the decline, the investment banking and financial consulting firm says in the report.

There were 155 deals among US and Canadian brokers, agents and related insurance intermediaries in the first quarter, down from 188 in the same period in 2023.

“On a trailing 12-month basis, we’re back to levels that we last witnessed at the end of 2020,” said Steve Germundson, a partner at Optis.

BroadStreet Partners announced the most deals in the quarter with 29, followed by Hub International with 12, Inszone Insurance Services with ten, and Keystone Agency Partners with eight.

Private equity-backed buyers and private firms with significant outside financial support accounted for 71% of deals announced in the quarter.

Publicly traded brokers announced 12 deals, with Arthur J. Gallagher accounting for seven.

Despite the reduction in deals by several previously highly active buyers, demand for agencies remains high, and prices for top-performing companies is strong, said Timothy J. Cunningham, Optis’ managing partner.

“We don’t expect this to change any time soon,” he said.

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