OPTIS: Mergers and acquisitions up

CHICAGO – Insurance agency mergers and acquisitions occurred at a rapid pace during the first six months of 2014, according to “Agent-Broker Merger & Acquisition Statistics, June 2014: The New Normal?” by OPTIS Partners, an investment banking and financial consulting firm with expertise in the insurance industry.
“The first six months of 2014 was the most active first-half period since tracking began in 2008, and second only to the 181 deals announced in the second half of 2012,” according to the report released in August.
A total of 165 mergers and acquisitions were announced in the first six months of 2014, an increase of nearly 40 percent over the 118 M&A announcements during the same period in 2013.
“The empirical evidence would suggest that the last half of 2014 is the start of a prolonged active period for agent-broker M&A transactions,” according to the report.
“The agency-brokerage business is awash with baby boomer principals reflective of America’s demographics, with an estimated 30 percent of all the equity in the system owned by those baby boomers,” the report said. Without a clear perpetuation plan, many of those baby boomer firms will likely be sold to a third party in order for the principals to capitalize on the value of company, OPTIS Partners predicted.

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