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Insurance M&A Trends: 2024 Report

Updated: Mar 29

We are barely three-quarters of the way through Q1, and already the year 2024 is proving to be both robust and complicated – terms have changed, new buyers have shown up, and old buyers have pulled out. 


The following report contains our observations of insurance M&A trends in 2024. We base these findings on our own proprietary data in addition to the industry reports listed below


  • H2 2024 Will See Increased Deal Volume & Value If Interest Rates Lower

  • Insurance M&A Buyers Are Looking For New Things In 2024

  • Equity will play a larger role in deals


H2 2024 Will See Increased Deal Volume & Value If Interest Rates Lower


2023 is widely regarded as one of the worst years for M&A in recent memory. We’ve written before about how this is not completely true - some industries did see drops in deal value as interest rates began to rise, especially in instances of larger transactions and megadeals. However, volume and value in the insurance sector remained remarkably stable.


Federal Interest Rates vs. EBITDA Multiples, Q1 2022 - Q1 2024


Federal Interest Rates vs. EBITDA Multiples, Q1 2022 - Q1 2024


That being said, many buyers have reportedly held off on prospective acquisitions until the market conditions improve, resulting in a historically high amount of dry powder waiting in the wings. Q3 2024 saw the Federal Reserve announce a long-awaited projection of lowering interest rates by the end of the year, which is likely the news these buyers have been waiting to hear. As a result, our analysts predict a flurry of M&A activity in H2 2024. 


Insurance M&A Buyers Are Looking for New Things in 2024


The insurance M&A trend for the last few decades has seen buyers looking at revenue vs. operating expenses, number of policies, carrier relations, and other factors directly related to the cash flow of the agency. As insurance M&A enters into the 2020s, however, buyers are looking at several additional factors that speak to an agency’s more intangible qualities.


  • AI has been a touchy subject in insurance M&A for years, with some predicting that it will replace brokers entirely. These discussions have not explicitly reached the dealroom yet, as far as we have observed, however, tech-savvy agencies are currently more likely to sell at a higher multiple than traditional ones.


  • As PE firms make up a larger percentage of insurance M&A buyers active in the market today, buyers are increasingly looking at sellers who are willing to stay on post-acquisition, either as employees or as consultants, to ensure a smooth transition and maintain client/carrier relationships. 


Equity Will Play a Larger Role in Deals


Insurance companies and brokerages alike have traditionally focused on a cash payout at the time of the transaction. Over the last decade, however, data from the SF Index - a catalog of the top 400 insurance buyers - suggests that equity has played a larger role in more recent deals. 

Insurance M&A Trends: Equity in Insurance M&A Deals



This is not surprising, based on the sense of general macroeconomic uncertainty over the last 5 years that resulted from the perfect storm of a global pandemic, uncertain supply chain issues, and economic downturn. In situations like these, the promise of an asset that continues to grow in value over time makes a better deal for buyers seeking to minimize their buyout and sellers hoping for a larger payout further down the road. 


The challenge, and a detail of which sellers are becoming increasingly aware, is that not all stock is the same. Beyond the varying classes and types (e.g., common, preferred, growth), the base value of company A's stock will be inherently different from that of Company B. As a result, deals are becoming more complicated and often more prolonged. 


Sica | Fletcher Understands Insurance M&A Trends


If all goes according to projections, 2024 is set to be a good year for M&A - this is especially true if interest rates decrease as predicted in H2. Still, it is early in the year; with several ongoing geopolitical events and the uncertainty of an election year, sellers will want an advisory firm who not only understands insurance M&A trends, but who can navigate those waters regardless of the conditions. Our team at Sica | Fletcher is that firm. Contact us using the information below to discuss your next steps. 


About Sica | Fletcher:  Sica | Fletcher is a strategic and financial advisory firm focused exclusively on the insurance industry. Founders Michael Fletcher and Al Sica are two of the industry's leading dealmakers who have advised on over $16 billion in insurance agency and brokerage transactions since 2014. According to S&P Global, Sica | Fletcher ranked as the #1 advisor to the insurance industry for 2017-2023 YTD in terms of total deals advised on. Learn more at SicaFletcher.com.


Contact: Mike Fletcher

Managing Partner, Sica | Fletcher


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