What You Need to Know
- Though market volatility has affected some deals involving insurers, M&A remains strong after a record year in 2021.
- Corporate-backed and private equity-backed consolidators continue to shop for brokers.
- Rising rates could eventually lead to a recovery in insurer deal volume.
The new investment market volatility has slowed some deals involving insurers — but not the pace of acquisitions for life, health and annuity brokers.
Stacy Kirshner, a managing director with the transaction advisory group at Alvarez & Marsal, gave that assessment in a recent email interview.
Alvarez & Marsal is a professional services group that’s well-known for its restructuring and turnaround expertise. It’s also a major player in the insurance deal advisory market.
What It Means
Even if you have no interest in selling your advisory practice, all of those acquisitions might be increasing the value of your practice. That could increase your ability to use the value of your practice to make deals of your own, or to use equity stakes or other strategies based on the value of your practice to attract talent.
The Big Picture
Kirshner said that, overall, insurance organization deal volume was lower in the first half of this year than in the first half of 2021.
But 2021 was a record year for mergers and aggregations, and M&A volume continues to be strong, Kirshner said.
“We remain bullish on our outlook for insurance M&A for the second half of 2022,” she reported.
Here are some of her other observations.
1. Volatility has been tougher on the product issuers than the sellers.
Some buyers are trying to cut what they pay for insurers.