person on rising bar chart looking through telescope The total number of deals in the insurancebrokerage space hit an all-time high in 2019 with 649 totaltransactions, up from 643 in 2018. (Photo: Shutterstock)

Insurance brokerages and agencies have emerged as primeacquisition targets for a multitude of different buyers. Theseagencies have experienced steady growth over the past several yearsthanks to a flurry of market tailwinds. Improving macroeconomicconditions and rising demand for insurance coverage in a hardeningmarket has resulted in growing insurance premiums. Considering mostbrokerages make their revenue from commissions, these risingpremiums have positively impacted brokers' bottom lines..

These dynamics have caught the attention of both strategic andfinancial buyers looking to acquire businesses with strong cashflows and solid fundamentals. Because of this, competition fordeals is high, and agency valuations have also increasedsignificantly.

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