At 232, the number of insurance agency mergers and acquisitions in the first half of 2016 came in just one fewer than 2015's record first half of 233 deals, according to data from Chicago-based OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.

First-half M&A activity this year also extended the streak of 100 or more transactions to seven consecutive quarters. The last three-month period when brokers did not complete at least 100 deals occurred in the third quarter of 2014.

“Buyers and sellers continued to feed their hearty appetites for deals and push up the M&A activity trend line,” said Timothy J. Cunningham, managing director of OPTIS, and National Underwriter P&C/PC360 advisory board member. “We anticipate the recent strong industry-consolidation trend will continue for the near term as acquisitions are an important growth strategy for many firms, especially those backed by private-equity capital."

Who's buying and selling
OPTIS' data covers U.S. and Canadian agencies selling primarily Property & Casualty insurance, agencies selling both P&C and employee benefits, and those selling only employee benefits.

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During the past four years, agency M&A has climbed steadily, with strong buyer interest pushing up prices. The OPTIS report segments buyers into five groups: private-equity backed brokers, privately held brokers, publicly traded brokers, banks and others.

PE-backed brokers were the most active group, contributing toward 114 of the 232 transactions. Privately held brokers followed, with 68 deals, which is five percentage points higher (29 percent in first-half 2016) compared to the same period in 2015.

Publicly traded brokers came in third, with 24 deals, which is down three deals from 2015's first half, while banks had 15 deals, up three compared to the first half of 2015.

P&C firms have remained the dominant seller group. In the first half of 2016, they accounted for 53 percent of all transactions (124 announced transactions), slightly down from 2015's 57 percent. Benefits firms announced 43 deals, while P&C/benefits brokers came in at 40.