2017 is on pace to be a record-setting year for insurance agencymerger and acquisition (M&A) activity, according to OPTISPartners' recently released third quarter report.

So far in the first nine months of 2017, 457 total transactionshave been reported, compared to 350 transactions in total for2016.

OPTIS asserts the market for insurance agencies remains "aseller's market."

"There's no end in sight to the upward trend. The appetite ofbuyers is undiminished, as is the supply of agencies for sale,"said Timothy J. Cunningham, managing director of OPTIS Partners, aninvestment banking and financial consulting firm specializing inthe insurance industry.

Related: 5 things most insurance agents & brokers don'tknow about agency acquisitions

"It's absolutely certain 2017 will be another record-settingyear for M&A activity," Cunningham added. "The activity isfueled by aggressive buyer valuations, in particular fromprivate-equity backed buyers who are flush with cash. And there's aplentiful supply of aging agency principals who need to completetheir exit strategies."

Related: M&A insurance activity strong in 1st half of2017: PwC reports

OPTIS Partners' proprietary M&A database covers U.S. andCanadian agencies selling primarily property-and-casualtyinsurance, agencies selling both P&C and employee benefits, andthose selling only employee benefits.

Their third quarter report places buyers among five groups:private-equity (PE) backed brokers, privately held brokers,publicly held brokers, banks, and all others in the fifth and finalcategory. The following graphs report each group's transactionsfrom buyers' and sellers' for 2015-2017, including the Trailing12-Months (TTM) totals through September.

As shown in the graph below (Transactions by Buyer Ownership),privately owned brokers accounted for the most transactions with 65deals. Private-equity backed brokers bought 50 agencies, whilepublicly owned brokerages bought 10 firms, and banks made sixacquisitions.

The report makes an important note of the change inclassification of Acrisure from a PE-backed to a privately ownedfirm in November 2016, which OPTIS says has caused a significantswing in the totals by buyer type. If not for this change, thePE-backed transaction count for the quarter would have been 73deals compared to only 42 from the privately owned buyers.

The chart above looks at transactions by seller type from 2015through the first three quarters of 2017. The data here shows thatproperty & casualty agencies continue to be most popular,accounting for 69 deals in the third quarter. Sales of employeebenefits brokers have picked up in 2017, totaling 34. Of agenciesselling both P&C and benefits, 15 were sold, as well as 15 inthe "other" category.

"Sellers have a great opportunity today," said Daniel P. Menzer,CPA, partner with OPTIS Partners. "If you are a potential seller,consider acting sooner than later while the irons are hot and thepricing is favorable. If you're a buyer, do your homework on thepotential seller. Fully evaluate their risk and growth potential.Look at the financials in depth and consider qualitative factors.Overpaying can be deadly."

Related: Global insurance mergers & acquisitions slowedto $33B in 2016, says Conning