By David Bull

May 8 - (The Insurer) - Optis Partners has released data showing that there were 141 announced insurance agency M&A deals in the first quarter of 2025, down 15% from the 166 in the same period of 2024.

The Minneapolis-based investment banking and financial consulting firm’s M&A database showed that Q1 was the slowest quarter for activity since the second quarter of 2020, as it said that nine consecutive quarters have fallen below the long-term trend line.

“We think the pace will ultimately pick up this year because of the large number of active buyers in the market, although current economic uncertainties may cause a bit of a delay," said Optis partner Steve Germundson.

The update noted that BroadStreet Partners was the most active buyer with 18 deals in the quarter.

The U.S. broker last month announced it had secured an investment led by Ethos Capital, British Columbia Investment Management Corporation and White Mountains, alongside existing backer Ontario Teachers.

World Insurance Associates was the second most active buyer with 10 deals, followed by King Risk with seven deals.

Optis noted that while Arthur J Gallagher made few acquisitions than in the past in the quarter, it did announce a deal for AssuredPartners – which is pending regulatory approval – and Woodruff-Sawyer.

PE BUYERS DOMINATE

The report noted that private equity-backed and hybrid buyers continued to dominate deal activity in the first quarter, representing 73% of all transaction. The group of this category of buyers includes 26 firms.

Privately held brokers completed 25 acquisitions in the quarter, while publicly held brokers reported 13 deals.

Meanwhile, P&C agencies were the biggest sells, accounting for 96 transactions in the quarter, or 68% of the total. Benefits agencies represented 10% of the deals, with P&C/benefits agencies 8% and all other sellers making up the balance.

2025 ‘SHOULD BRING MORE MEGA-DEALS’

Following the heightened activity involving large-scale broker M&A, Optis managing partner Timothy Cunningham noted that several private equity-backed firms are getting ready to put themselves on the market or recapitalize.

“We also expect more large privately owned agencies will be sold this year," he added. "The sale of San Francisco-based Woodruff-Sawyer, with $268 million in estimated revenues, points to further mega-deals this year.”