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May 05, 2015 at 09:42 AM
Insurance agencies and brokerages are hot properties these days, fetching high prices as firms seek to consolidate or cash out in an ever strengthening economy.
This theme emerged during a three-day workshop on insurance business strategies in Atlanta, hosted by strategic consulting firm Reagan Consulting. In attendance were some 150 executives from leading firms in the insurance and M&A fields, with the Council of Insurance Agents & Brokers and the American Bankers Association serving as co-sponsors.
Bobby Reagan, Reagan Consulting CEO, told the attendees that valuations in the frothy insurance market had “never been higher,” according to a company press release. Deal activity was described as “brisk,” with the prices being paid setting new records.
“We have never seen valuations as strong as they are today. Already high deal multiples have jumped another 10 percent during the past 18 months,” said Kevin Stipe, president of Reagan Consulting. “There is a lot of demand among all buyer groups, but private equity buyers are now most active — 43 percent of all acquisitions in 2014. These buyers are most responsible for pushing acquisition multiples to record levels. With widespread buyer demand, there is nothing today to suggest that valuations will be going down any time soon.”
