Insurance Agency Mergers Dip in 2024, High-Profile Deals Persist

In 2024, the number of announced insurance agency mergers and acquisitions decreased by 10%, totaling 750 compared to 833 in 2023, as per OPTIS Partners. Despite a 21% increase in deals during the second half of 2024 compared to the first half, the total deals were down 8% from the same period in 2023. High-profile acquisitions included AON's $13 billion purchase of NFP and Arthur J. Gallagher's $13.45 billion deal for AssuredPartners, both expected to close in early 2025.

OPTIS Partners categorizes buyers into four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and others. Unique buyers in 2024 numbered 98, a significant decrease from 122 in 2023, and the activity levels of private equity firms remain high, accounting for 72% of transactions. The P&C sector dominated with 64% of total deals, while sellers primarily included property/casualty and employee benefits brokerages.

The M&A landscape is stabilizing, with expectations for a moderate rise in large-scale deals in the next 12 to 24 months as firms continue seeking to scale up operations. Valuations for good agencies are anticipated to remain strong due to persistent demand in the marketplace. Overall, while the pace of mergers and acquisitions has slowed, strategic buying continues among key firms in the insurance sector.