Insurance mergers and acquisitions decrease even with significant purchases.
In 2024, the insurance distribution sector saw a decline in the number of mergers and acquisitions (M&A) compared to the previous year. The report by OPTIS Partners revealed that there were 750 announced deals in 2024, a decrease from 833 deals in 2023 and 1,031 deals in 2022. This total was 15% below the five-year average.
Despite the overall decrease in M&A activity, the year was characterized by several significant transactions that reshaped the insurance distribution landscape. Aon’s $13 billion acquisition of NFP Corp., Marsh & McLennan Agency’s purchase of McGriff Insurance Services for $7.75 billion, and Arthur J. Gallagher & Co.’s plans to acquire AssuredPartners for $13.45 billion were among the major acquisitions that took place. These transactions further solidified the positions of Aon, Marsh, and Gallagher as key players in the industry, both globally and in the U.S. middle market.
Over the past decade, eight firms have dominated the M&A activity in the insurance sector, accounting for 42% of all deals. These firms include Acrisure, Hub International, BroadStreet Partners, AssuredPartners, Arthur J. Gallagher, PCF Insurance, World Insurance Associates, and Alera Group. In 2024, these firms were responsible for 36% of the year’s deals, with BroadStreet Partners notably increasing its deal-making efforts and completing 90 transactions, a 53% increase from the previous year.
The report also highlighted a trend of consolidation within the industry, with 98 unique buyers of agencies and brokerages in 2024, comprising 58 privately held firms and 40 private-equity firms. The number of unique buyers has decreased over the past decade, indicating a consolidating industry landscape. The report stated that this trend is likely to continue, albeit at a slower rate, with a significant number of firms expected to sell over the next decade, attracting capital from investors looking to invest in the insurance industry.
Overall, the insurance sector is experiencing a trend of consolidation driven by a large number of sellers being acquired by fewer buyers. Despite the decline in the number of M&A deals in 2024, the major acquisitions that took place have reshaped the industry and accelerated the pace of consolidation. The industry is expected to continue evolving as key players solidify their positions and smaller firms seek opportunities for growth and acquisition.
