Most recently, High Street announced the acquisition of two Pennsylvania insurance agencies: Lock Haven-based Davis Insurance Agency and Michael Pigott Agency in Bensalem. Both firms became part of High Street’s Northeast region and will report to James Hutchinson, who serves as chief marketing officer and president of High Street’s Northeast region.
Since 2018, High Street has closed 128 acquisitions, including 71 in 2021 alone, according to Optis Partners’ fourth quarter report that depicted a slower market in the second half of last year.
“Changes appear to be afoot in the brokerage mergers and acquisitions sector as a significant rise in interest rates and economic uncertainty are likely forcing some buyers to pull back and causing nearly all buyers to proceed more cautiously,” according to the Optis report. “That, coupled with the large volume of sellers in the prior two years looking to avoid a perceived threat of rising capital gains rates, is likely the root cause of a pullback in deal activity.
Optis Partners counted 987 acquisitions nationwide in 2022, down from the record 1,034 in 2021, but still much higher than any other year since 2013 as the industry continued to consolidate.
Deal activity slowed in the latter half of the year as interest rates increased. The pullback began in the second half and each month was less active than in the prior year from July to December, according to Optis.
“We expect to see the slower pace continue in 2023 as higher costs of capital and economic uncertainty will likely lead many to a slow-as-you-go strategy, and highly leveraged buyers may need to take a complete breather to digest what they’ ve purchased,” the authors of the Optis report wrote. “These conditions may create opportunities for well capitalized buyers, and at the same time the shrinking inventory of privately owned A-tier firms creates scarcity value for sellers.”
At Acrisure, the 2022 deal flow continued an ambitious acquisition strategy that’s been going on for years. Since 2018, Acrisure has closed 536 acquisitions and helped to drive revenues to nearly $4 billion in 2022, up from $38 million eight years earlier.
The global insurance brokerage and fintech expects “a similar level of activity in 2023 as we have transacted in recent years,” Elliot Bundy, Acrisure’s chief communications and marketing officer, wrote in an email to Crain’s sister publication MiBiz.
Acrisure in May 2022 closed on $725 million from a Series B-2 preferred equity round that elevated the company to a $23 billion valuation, a 31-percent increase from the prior equity raise in March 2021.
Acrisure in recent years has been expanding globally. The company announced last month that it acquired Affinity Brokers Limited, a commercial insurance broker based in Glasgow, Scotland, and partnered with a reinsurance broker in Poland.
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