Broker M&As fell 24% in 2023: Optis

Mergers and acquisitions among U.S. and Canadian insurance intermediaries fell to 782 in 2023, 24% lower than the prior year and 8% below the five-year average, according to a report issued Friday by Optis Partners LLC.

Several of the historically most active acquirers, including Acrisure LLC and PCF Insurance Services, pulled back significantly as they focused on integrating past acquisitions or paused to “digest substantial amounts of debt,” Chicago-based Optis said.

Deals in the second half of 2023 were up 4% over the first half of the year but 27% down compared with the second half of 2022. Fourth-quarter deal volume was about the same as the third quarter at 204 but 32% lower than the prior-year period.

“The second half of the year is usually busier than the first half, but 2023 is a story of consistent levels of deal activity throughout the year,” said Steve Germundson, a partner at Optis.

Hub International Ltd. was the most active acquirer, with 65 deals in 2023, down 7% from the number of deals it announced in the prior year. Broadstreet Partners Inc. was second with 59 transactions, then Inzone Insurance Services with 46, and Acrisure, Arthur J. Gallagher & Co. and World Insurance Associates LLC, which completed 36 deals each.

Private-equity-backed buyers continued to dominate brokerage M&As, accounting for 69% of deals last year, but that proportion was down from the 77% of deals the group accounted for in 2022.