M&A Market Update Vol III, Issue 4

M&A Activity For Insurance Brokerage Through Q3 2024 Trending 8% Higher Than 2023

As of September 30, 2024, there were 490 announced M&A insurance brokerage transactions in the U.S. Activity through September is trending 8% higher than the start of 2023, which saw 454 transactions announced through this time last year.

Private capital-backed buyers accounted for 358 of the 490 transactions (73.1%) through September. Independent brokerage were buyers in 83 deals or 16.9% of the market. Transactions in which banks were buyers continued to fall, declining from 18 transactions in 2022 to nine transactions in 2023 – an all-time low. So far in 2024, bank buyers have completed four acquisitions. Deals involving specialty distributors as targets accounted for 82 transactions or 16.7% of the total 490 deals in 2024 – a 5.7% percent decrease in transaction share over 2023. This decrease in percentage share in 2024 may be a trend to watch.

The top ten buyers accounted for 51.8% of all announced transactions, while the top three (BroadStreet Partners, Inszone Insurance, and Hub International) account for 24.9% of the 490 total transactions. For comparison, the top 10 buyers in all of 2023 accounted for 41.9% of total transactions, with the top three representing 16.2%.

Notable Transactions:

September 17: Monarch E&S Insurance Services, a division of Specialty Program Group LLC,  acquired the assets of Professional Insurance Executives, Inc. (PIE), a contract binding and brokerage business based in Garland, Texas. This acquisition enhances Monarch E&S’s position as a leading national contract binding and brokerage platform and supports its goal of expanding into key markets. PIE is known for its strong underwriting expertise and focus on innovation and customer service. The acquisition allows Monarch E&S to strengthen its underwriting capabilities and expand its market presence, while PIE gains access to broader resources to improve service delivery and provide more comprehensive solutions for its clients. MarshBerry served as advisor to Professional Insurance Executives in this transaction.

September 30: Marsh McLennan agreed to acquire McGriff Insurance Services for $7.75 billion through its Marsh McLennan Agency, aiming to enhance its capabilities across various insurance lines such as commercial property and casualty, employee benefits, management liability, and personal insurance. The acquisition comes amid rising demand for insurance policies from businesses, driven by wage growth and an improving economic outlook. McGriff, founded in 1886 and an affiliate of TIH Insurance Holdings, generated $1.3 billion in revenue over the past 12 months and offers services including corporate bonding, cyber insurance, and title insurance. The deal, expected to close by year-end, will be funded by cash and debt financing, with McGriff’s team of over 3,500 employees joining Marsh McLennan Agency.

Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only. Scorecard year-to-date totals may change from month to month should an acquirer notify MarshBerry or the public of a prior acquisition. 2024 statistics are preliminary and may change in future publications. Please feel free to send any announcements to M&A@MarshBerry.com.

Source: S&P Global Market Intelligence, http://www.insurancejournal.com, http://www.businessinsurance.com/ and other publicly available sources.