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For agency owners looking to sell their business in 2024, it’s helpful to know something about the insurance M&A buyer landscape before going in. This information can provide you with context to determine what type of buyer is best for you and the type of buyer you’re most likely to encounter in today’s market, all of which can help you determine whether it’s the right time to sell.
This article seeks to provide readers with information on the top insurance agency buyers of 2024, which we have broken down into the following sections:
The Overall Buyer Landscape
One of the most challenging aspects of the insurance M&A buyer landscape in 2024 is the rate at which it changes. It used to be the case 18 years ago that only about 5 total buyers in the sector were taking up approximately 95% of deals, with the remainder going to smaller deals. The late 2010s, however, saw an explosion of private equity activity that has dramatically increased that pool from 5 to more than 50.
While this influx of buyers means a significant increase in competition – and results in more favorable rates for sellers overall – it also makes the buyer landscape difficult to track when each year changes more drastically than the last. For example, a buyer who was very active last year may hold back this year to accumulate more dry powder before entering the market (or vice versa).
The graphic below illustrates the dramatic differences in activity among the top 25 buyers between 2022 and 2023.
In a clear example of buyers’ extreme variability, big players like PCF came in at #2 overall in 2022 but dropped all the way back to #20 by the end of 2023. This kind of shift indicates that the best options for a given agency change every year, which underscores the importance of understanding the current landscape before getting started. The following section details the insurance M&A buyer landscape as of Q3 2024.
The Top Insurance Agency Buyers of 2024 (So Far)
The table below lists the top insurance agency buyers of H1 2024, as per proprietary information taken from our Sica | Fletcher index, which monitors approximately 70% of the deals in the insurance M&A sector so we can track the most active buyers. To provide a sense of context for buyers’ current standing, we also include information from 2023.
The Top Insurance Agency Buyers of H1 2024
Rank | Buyer Name | 2023 Rank | Deal Volume |
1 | BroadStreet Partners | 2 ↑ | 23 |
2 | Inszone Insurance Services | 6 ↑ | 23 |
3 | Hub International | 1 ↓ | 15 |
4 | Integrity Marketing Group | N/A | 14 |
5 | Leavitt Group Enterprises | N/A | 10 |
Perhaps the most intriguing development among 2024 insurance agency buyers is the rise of Leavitt Group Enterprises, an independent insurance brokerage. Their rise to #5 marks the first time in several years that a non-PE-backed buyer has reached the top five. While it’s too soon to suggest that this heralds a more significant in the insurance M&A buyer pool, it is certainly worth noting.
The following section details the traits of several insurance agency buyers to help readers determine the best options for them.
What Makes a Good Insurance Agency Buyer
Insurance agency buyers typically fall into two categories:
Strategic: Companies who are in the insurance industry (or a related industry) and seek to acquire an insurance agency with the intent of using it to improve their own business.
Financial: Often referred to as private equity, these buyers are interested in purchasing an insurance agency for the express purpose of making it more profitable and then reselling it further down the road. Private equity firms make up approximately 92% of the current buyer pool, making them the most common type of buyer that sellers will likely run into.
Fundamentally, understanding your best option for an insurance agency buyer comes from understanding your own goals post-closing. For example, a legacy-minded seller is more likely to prioritize a buyer who will preserve the core messaging and values of the agency, while someone seeking a high payout is likely to seek a buyer with a larger amount of dry powder available.
The table below outlines the most common agency owner motivations, as well as what type of buyer can best meet those goals:
Insurance Agency M&A: Owner Motivations & Ideal Buyers
Goals | Ideal Buyer |
Highest Payout | Strategic Buyer |
Quickest Deal | Private Equity |
Preserve the agency’s legacy | Strategic Buyer |
Grow equity over time | Private Equity |
Succession Planning | Strategic Buyer |
It’s important to note that we have observed these buyer and seller tendencies as trends; however, they are not formally encoded as rules. Exceptions to these trends occur often enough. For example, a private equity firm might have a vested interest in preserving the legacy of an agency with a strong reputation, and a strategic buyer might absorb a company simply to eliminate a competitor.
Although it’s important to target a buyer that meets your specific needs, any good insurance agency buyer should possess a few essential qualities, including:
Financial Stability
Most sellers prefer financially stable agency buyers because they are capable of large payouts without having to make a leveraged buyout, which typically means a better payday for the seller. In addition, they typically provide better post-closing services, as they have sufficient means to finance integration between companies, mitigate risk, and handle any unexpected challenges down the road.
Sellers should pay special attention to the following documents:
Strong balance sheet
Consistent revenue growth
Credit/financing options
Positive cash flow
Industry Expertise
Insurance agency buyers with a sound knowledge of the insurance industry are better able to maintain and improve agency operations post-closing, making them especially ideal for the legacy-minded seller.
In general, however, sellers can benefit from the fact that industry buyers often have a better handle on the challenges associated with regulatory compliance, which can sometimes delay or stop deals before completion. Carefully consider the buyer’s reputation within the insurance industry.
Buying Activity
Insurance agency sellers must consider a few contextual details around buyer activity, including:
The total number of deals made in the last year
The type of insurance agencies previously purchased (e.g., size, revenue, etc.)
The amount of dry powder the buyer is believed to have
Knowing which agencies the buyer has acquired in the past can also give you a good indication of the deal structure they prefer. For example, knowing how much equity the buyer has utilized in previous deals can give you a good idea of what to expect when you finally sit down at the negotiating table.
Post Acquisition Support
Although deal duration has increased in the last few years to an average of 9-18 months, sellers often find they must live with the buyer long after closing. Keep a close eye on earnouts, post-closing employment contracts, and how well a buyer supports the seller following the finalized negotiations.
Out of all these potential buyer qualities, the most important factor to ensure is that the buyer meets your specific needs. One of the best ways to do that is by working with an experienced M&A advisory firm that can leverage a network of contacts to connect you with the best available insurance agency buyers.
Evaluating Your Best Option for Insurance Agency Buyers
We hope this piece clarifies how exceptionally difficult it has become to understand the M&A landscape of insurance agency buyers in the 2020s. While it takes some time to understand the theory behind these buyers on paper, finding the right buyer for your agency in the real world is an even more complex process. It requires an extensive network of buyer contacts that most agency owners do not have.
That’s one of several reasons why it’s so important to work with an experienced M&A advisory firm. Sica | Fletcher has been the leading name in the industry for the last decade since our founding in 2014. In that time, we’ve worked with thousands of agencies just like yours to secure the best possible payouts under the most favorable terms for our clients. Reach out to our team using our contact page or the contact information below.
About Sica | Fletcher: Sica | Fletcher is a strategic and financial advisory firm focused exclusively on the insurance industry. Founders Michael Fletcher and Al Sica are two of the industry's leading dealmakers who have advised on over $16 billion in insurance agency and brokerage transactions since 2014. According to S&P Global, Sica | Fletcher ranked as the #1 advisor to the insurance industry for 2017-2023 YTD in terms of total deals advised on. Learn more at SicaFletcher.com.
Contact: Mike Fletcher
Managing Partner, Sica | Fletcher
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