The number of insurance agency mergers and acquisitions declinedslightly during the first half of 2013, with 122 reportedtransactions in the U.S. and Canada compared with 133 dealslast year, according to OPTIS Partners, a Chicago-basedinvestment banking and financial consulting firm specializingin insurance.

“It was a period of relative calm after the perfect storm ofgetting deals done before the capital gains tax-hike,” said OPTISPartner Timothy J. Cunningham. “This year's numbers are inflatedsomewhat because many of the deals reported in January and some inFebruary probably closed in 2012.”

OPTIS reported 76 transactions in first-quarter2013, but just 46 in the second quarter.

Privately owned brokers were the biggest buyers, making 45acquisitions compared to 40 during the same period in 2012.Private-equity-backed brokers made 40 acquisitions, the same numberas last year. Deals conducted by publicly owned brokers fellfrom 30 to 18, while banks made 14 acquisitions, up from10.

Hub International accounted for 14 deals in the first half ofthe year, followed by Arthur J. Gallagher (nine deals), and Digitalinsurance (seven).

Sales of property-casualty-focused agencies stood at 46. Therewere 30 deals for agencies selling both P&C and employeebenefits, 36 sales of employee benefits-only agencies, and 10 othertransactions, primarily MGAs being sold.

“We don't expect to see a comparable level of activity for theremainder of 2013 as we saw in 2012, but we also strongly believethat over the long term, M&A activity will continue to grow,”Cunningham said. “There are plenty of buyers with readily availablefunds in the marketplace today. Buyers need the growth acquisitionsprovide, and the demand will continue to keep valuations attractiveto sellers.”

A complete copy of the report is available at http://optisins.com/articles/M&A_Analysis_Final.pdf.