Insurance sector sets hot pace of acquisitions

The insurance industry is having an acquisition moment.

There were 426 insurance mergers and deals in the first six months of 2022. That’s up 16% from 369 deals in the first half of 2021, according to a new report from agent-broker M&A advisory firm Optis Partners LLC. The second quarter of 2022 was especially busy: With a 20% increase in deals, it was the fourth-most-active quarter of all time.

Notably, M&A activity in the sector is up 13%  over the first-half five-year average, the report also found. That’s a period regarded as the insurance industry’s most active M&A market ever.

The list of individual firms doing the acquiring is a bit top-heavy, as the top 10 accounted for 55% of all deals in the first half of the year. Utah-based PCF led the way, with 48 deals, up 71% from 28 deals in the first six months of 2021, the report shows. Acrisure and Hub were No. 2 and No. 3 on the list, with each up 40% in deals over 2021.

The report notes that buyers also seek opportunities to acquire companies that are adjacent and related to insurance distribution and the agency/brokerage business. That list includes life/financial services and actuarial and human resources consulting.

Fort Myers-based Foster & Foster Consulting Actuaries is one local example of a company following that trend. The health and welfare plan consulting firm, which provides pension-consulting services for public entities, recently acquired California-based Bartel Associates LLC. Founded in 1979, Foster & Foster acquired firms in the same niche in both Pennsylvania and Michigan in 2021, according to a statement.

Another area company that’s been a big player in the insurance acquisition market is Tampa-based BRP Group. The publicly-traded insurance brokerage has acquired at least 20 companies in the past five years, in a dozen states. The firm’s deals in 2021 represented over $200 million in additional annual revenues.