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RESILIENCY OF THE INSURANCE INDUSTRY REAFFIRMED

Posted by Phil Trem on February 23, 2021

After the pandemic all but froze the M&A market in 2Q20, buyer activity resumed with the pace and appetite that kicked-off the year.

After the pandemic all but froze the merger & acquisition (M&A) market in Q2 of 2020, buyer activity resumed with the pace and appetite that kicked-off the year. The result was a year that met initial expectations and should set-up 2021 for even more activity now that the resiliency of the insurance industry has once again been reaffirmed.

Based on 2020 data, the 705 announced M&A transactions in the United States represents an 8.0% increase over the record numbers seen in 2019. Through January 31, 2021 there has been similar activity to the last two years with 45 announced transactions so far. This figure is anticipated to continue to grow as deals are announced and added retroactively throughout the year.

Early data collected for the first four weeks of 2021 suggests the same trends are continuing regarding buyer types and their respective shares of the market. Private Capital backed buyers account for 30 of the 45 transactions (66.7%) in January, while independent firms make up 26.7% of the total. The number of deals completed by independent agencies is anticipated to increase compared to 2020, as business continues to normalize as pressures from the pandemic and spending restrictions are relaxed.

Hub International Limited, Higginbotham & Associates, Inc., and USI Insurance Services LLC are the top three most active buyers in the U.S. to start 2021, contributing a combined 31.1% of the 45 total transactions. The top 10 most active buyers completed 25 of the 45 announced transactions (55.5% of total).

Some notable transactions to start the year:

  • January 1:Four of Georgia’s premier insurance brokers, Founders Insurance, Hutchinson Traylor Insurance, McGinty-Gordon & Associates, and Waites & Foshee, formed Oakbridge Insurance Agency.  The firm is now one of the largest privately-owned Insurance, Surety, Risk Management and Employee Benefits agencies in the Southeast as well as becoming one of the country’s “Top 100” firms as ranked by Business Insurance.
  • January 21: AssuredPartners, Inc. announced its acquisition of Lancaster, PA-based Murray Insurance Associates, Inc. Murray is a provider of solutions for risk management, insurance, employee benefits, wealth management, third-party administration (TPA), and human resources. With 170 employees and $31 million in annualized revenue, Murray is also the 97th-largest brokerage in the U.S. according to Business Insurance’s most recent ranking.
  • January 21: Integrated Specialty Coverages (ISC) announced its acquisition of Sacramento, CA-based California Contractors Insurance Services, Inc. (CCIS). ISC, a world-class program administrator, purchased the licensed construction bond and insurance agency that leverages its network of over 70,000 licensed contractors to obtain license bonds, general liability, workers' compensation, contract bonds, and permit bonds in order to service a diverse contractor clientele. 
 
If you have questions about Today’s ViewPoint or would like to learn more about recent M&A activity, please email or call Phil Trem, President - Financial Advisory, at 440.392.6547.

 

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Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only.  Scorecard year-to-date totals may change from month to month should an acquirer notify MarshBerry or the public of a prior acquisition. 2021 statistics are preliminary and may change in future publications.  Please feel free to send any announcements to M&A@MarshBerry.com.

Sources: S&P Global Market Intelligence, insurancejournal.com, businessinsurance.com, and other publicly available sources.

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Topics: Financial Advisory, insurance, agents, brokers, insurance distribution, value, mergers, acquistion, buy, sell

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