Mergers and acquisitions among insurance brokers and agents declined 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 released Friday by Optis Partners LLC.
A drop-off in deals by two of the biggest acquirers over the past several years – Acrisure Inc. and PCF Insurance Services – accounted for much of the decline, the Chicago-based investment banking and financial consulting firm said in the report.
“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 Inc. announced the most deals in the quarter with 29, followed by Hub International Ltd. with 12, Inszone Insurance Services with 10, and Keystone Agency Partners LLC 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 in the quarter, with Arthur J. Gallagher & Co. accounting for seven of them.
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.