The total number of deals in the insurance brokerage space hit an all-time high in 2019 with 649 total transactions, up from 643 in 2018. (Photo: Shutterstock)
Insurance brokerages and agencies have emerged as prime acquisition targets for a multitude of different buyers. These agencies have experienced steady growth over the past several years thanks to a flurry of market tailwinds. Improving macroeconomic conditions and rising demand for insurance coverage in a hardening market has resulted in growing insurance premiums. Considering most brokerages make their revenue from commissions, these rising premiums have positively impacted brokers' bottom lines..
These dynamics have caught the attention of both strategic and financial buyers looking to acquire businesses with strong cash flows and solid fundamentals. Because of this, competition for deals is high, and agency valuations have also increased significantly.
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