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Insurance Brokerage M&A in the First Half of 2020

What the Data Is Telling Us

In our last few posts, we reported on what we perceived to be the trends in insurance agency and brokerage M&A in light of the pandemic and analyzed the reasons for these trends. In summary, we observed that:

  • The most active acquirers continue to be highly interested in acquisitions.

  • We see the same peak multiples as before the pandemic and generally the same number of parties interested in the companies we are bringing to market.

  • The number of transactions we are working on has not abated.

  • If the sellers’ financial results have been or will be significantly affected by the pandemic, acquirers are using structures like earn-outs and step ups to balance the risks and transaction compensation.

  • Private equity firms continue to drive transaction pace and value. They have enormous amounts of dry powder that they must deploy and continue to have access to very inexpensive debt.

Now we have the data that backs up our initial observations. This blog post analyzes the significance of the statistics included in our Second Quarter 2020 Sica Fletcher Agency & Broker Buyer Index.

Aggregate Number of Transactions

The best source of data we have found for the number of insurance agent and broker M&A transactions for a given period is data aggregated by S&P Market Intelligence on announced transactions. Of course, this data does not represent all M&A transactions for insurance brokers because many transactions simply go unannounced and unrecorded. Also, this data tends to change as S&P obtains more information about transactions that have been closed in a given period … thus the quarterly numbers tend to increase as the year progresses, which makes year-to-year comparisons more problematic.

We thought that the best way to highlight the current trends in the marketplace would be to show the data as initially reported by S&P for each quarter. This is what the data tells us, cut in this manner:

As you can see, there was very little change in the number of transactions in the second quarter of 2020 as compared to the same period in 2019. And, in fact, the number of transactions in 2020 exceeded the amount for the same period in 2018.

Transactions by the Buyers in Our Index

The companies participating in the SF Agency & Broker Index provide us with extremely precise data on trends in the M&A marketplace. The SF Index tracks both the number of transactions and the aggregate revenue acquired by thirteen of the most prolific agent and broker acquirers in the industry. These buyers typically represent in excess of 70% of the total transaction volume in our industry. Because Index members provide us with the data concerning their acquisitions each quarter, we have a high level of confidence in the accuracy of the data. Here is what the numbers show:

As you can see, while there was a reduction in the number of transactions closed by the SF Index members in the second quarter of 2020 relative to 2019 (90 versus 120), the revenue acquired from the acquisitions actually increased in this period versus the prior year ($629 million vs $564 million). While the number of transactions fell, the average size of each transaction closed increased substantially, to $7.0 million from $4.7 million.

We believe that the reduction in the number of transactions closed by the SF Index members was a function of supply availability rather than a reduction of demand. Five of the companies in the Index (Acrisure, BroadStreet Partners, Hilb, PCF, and USI) actually closed a higher number of acquisitions in the first half of 2020 than in the first half of 2019. Each of the 13 companies participating in the Index has reaffirmed with us its strong interest in continuing to acquire. One example is Brown & Brown, which saw a decrease in the number of transactions it closed in the first half of 2020 relative to the same period in 2019. The company made it a point in its second quarter 2020 investor earnings presentation to mention the acquisitions it closed in the period and emphasize that it is “remaining actively engaged with many M&A opportunities”.


The data contained in this blog validates the observations that we have been providing in our blogs since the beginning of the COVID-19 pandemic. The insurance agency and brokerage M&A market continues to be extraordinarily robust, despite all the challenges and the economic dislocation we have witnessed.

If you would like to have a discussion about your strategic options, please contact us or call us directly at 516.967.1958. We are here to help and would appreciate the opportunity to develop a dialogue and work as your strategic advisor to help you reposition your business for further growth and success.


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