Global M&A Activity to Grow in First Half of 2022

Property & casualty sales and benefits sales in the US and Canada were up 16% in the first half, reports OPTIS Partners

Reducing the flow rate Part Onemergers and acquisitions increased 16% in the first half of 2022 compared to the same period in 2021.

In total, there were 427 announced corporate acquisitions nationwide in the first half of 2022 (1H-2022). In comparison, 1H-2021 achieved a total of 369 acquisitions. OPTIS Partners notes that following the stabilization of the first quarter, the second quarter of 2022 rose 20% to become the fourth most active quarter of all time.

“One of the drivers is the increasing desire of active consumers to look for businesses that are close to business/business,” said Steve Germundson, a partner at OPTIS Partners, an investment banking and financial advisory firm specializing in insurance. “Approximately 53 of the 427 contracts announced were from financial services, medical professionals and medical professionals, technology, and other businesses related to the distribution of insurance.”

According to the company’s quarterly report, which monitors M&A activity throughout the country, the pace of activity in the first six months of 2022 was 13% higher than the average of the previous five years as compared to the same period. Interestingly, these five years are often considered the most active period in the M&A market.

“It wasn’t too surprising that the number of transactions made in the social media/brokerage segment was almost flat at an increase of 1.5%,” said OPTIS managing partner Timothy J. Cunningham.

“There aren’t the same number of vendors there as before,” he continued. “But consumers still have a lot of money to spend, and they’re finding opportunities to fill other needs in their businesses with companies in the larger space.”

OPTIS Partners Report Now Includes 4 Types of Sellers & Buyers

As mentioned in the first quarterly report of the year, OPTIS Partners has expanded its reporting in 2022 to include mergers & acquisitions of four types of buyers and sellers that deal with distribution insurance. These four categories include:

  • private-sponsored/hybrid businesses,
  • private brokers,
  • public brokers, and
  • all the others

The addition of the fourth category allows for the inclusion of business related to the insurance distribution process such as life / financial services and advisory services.

Most Dealers Continue to Be P&C Agencies

As shown in our statement of mergers and acquisitions taking place in our region in 1H-2022, the majority of sellers in the insurance industry continue to be P&C insurers. According to OPTIS Partners, 83% of all businesses sold were in the traditional insurance sector. Of those investments, 59% of the total, or 253 of the 427 announced so far this year involved P&C suppliers. At a distant moment, the sale of profit organizations was the second most active group with a figure of 53 announced which represents 12% of all M&A transactions in 2022. Sales of P&C / profit organizations represent the third most active group with 48 sales amounting to 11% of all businesses sold in 1H-2022. The last group, representing all other sellers within the insurance distribution, accounted for the remaining 17% of sales or 73 announced.

“Sales figures so far in 2022 and discussions with buyers show that the second half of the year should be strong. The finals may not be as high as 2021, but they may be close,” said Germundson.

Leading Global Marketers Include PCF, Acrisure and Hub

Here are some takeaways from the report about consumers:

  • The ten most active buyers accounted for 55% of all products announced so far in 2022, while 72 buyers accounted for the remaining 45% (43 buyers only got one).
  • Among buyers, PCF took the top spot for the first time with 48 sales that took place so far in 2022. This is an increase of 70% over the same period in 2021. Acrisure with 43 and Hub with 35 followed, both showing an increase of 40%. over the past year.
  • Others who saw a big jump in their ratings were Inszone at 20 (up nearly seven times), The growth of the Patriot at 16 and Keystone Agency Partners at 10 (both tripled). Some regular customers also called for services, including AssuredPartners seven (under 68%), World Insurance at nine (down 36%), Hilb at seven (down 22%), and BroadStreet at 16 (down 16%).
  • Other top buyers were High Street Partners (20) and Relationship (16 sales).

The hybrid crowd of buyers maintained their dominance in purchasing with 76% of all transactions in the first half of the year, while transactions among private groups accounted for 15%.

Top 10 Winners in 2021

The following is OPTIS Partners’ Top 10 list

BUYER BY TYPE 2018 2019 2020 2021 1H-2022
PCF insurance 4 4 36 99 48
Acrisure 101 98 108 122 43
Hub International 59 52 65 61 35
High Street Partners 1 3 9 71 20
BroadStreet Partners 34 34 58 45 16
Patriot Growth Insurance Services 25 21 31 16
Relationship Insurance 6 11 33 16
Opinions of the company Integrity Marketing Group 4 6 1 6 11
Keystone Agency 7 14 10
The rest 438 416 469 567 192
All That Happened 643 650 795 1061 427

Major Broker Changes in 1H-2021

In this quarter’s report, OPTIS Partner includes a new section called Significant Broker Transactions, listing three notable deals in 1H-2022:

  • California’s Westwood Insurance Agency sold to Baldwin Risk Partners in March 2022 for $82 million.
  • New York’s Famous Software was sold to Aquiline Partners in April 2022 for $122 million.
  • NSM Insurance Group was sold to Carlyle Group $250 million in May 2022.

How to access the full report and the Q1-2021 Report

The OPTIS Partners report is based on its own track record of active acquisitions and other publicized events. As such, although it is an accurate representation of commercial activity in the sector, it is very possible that the actual number of corporate purchases was much higher than the total number reported. One simple reason for this result is that many buyers and sellers do not report at all, while some buyers stop reporting small amounts. Access the report by clicking on the image below:

Alternatively, for those interested in reviewing or comparing the Q1-2021 report with this quarter’s report, please refer to the following link:

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