In 2014, there were 357 announced agent-broker M&Atransactions, an increase of more than 30% from the previous yearand more than 10% higher than in 2012. Notwithstanding an extremelyvibrant buy-side community, is it logical to assume that sellersare primarily motivated to capitalize on the value of one of theirportfolio's largest assets and take their proverbial chips off thetable at top-of-the-market values?

The answer is a quiet and subtle no. Lost in all of thehoopla over the extremely active M&A environment is the factthat the great majority of sell-side transactions occur due to manyfirms' inability to perpetuate internally.

Frankly, the demographics are not good. The agency population isaging. Not only are the equity owners reaching that magicalexit-retirement age and selling to acquirers, so too are asignificant number of the other production, management and supportstaff reaching their retirement ages. Baby boomers abound, and theindustry has done a woefully inadequate job of creating theenvironment to attract millennials and Generation X-ers. And thatwas during the down period of the economy post 2008, when many ofthose millennials and Gen X-ers struggled to find gainfulemployment on a meaningful career path.

This talent drain will come as death by inches. One by one, keystaff with multiple years of knowledge and experience will exit totheir retirement villages, but many firms aren't realizing thiscrisis until it is too late.

The industry must marshal its resources to craft and deliver themessage of what many of us know, live and embrace every day. Acareer in the insurance agency-brokerage world is second to none.It is rewarding personally and financially, and fun.

Although segments of the business will change due to the impactof the Web and e-commerce, I do not believe this emergingtechnology will have a major impact and lead to the demise of theindustry, except possibly in some commodity product lines.

Helping businesses, institutions and individuals protect andpreserve their assets brings a great deal of satisfaction. And theindustry has enough depth and complexity to have a place for manytalented individuals: sales, client service, management andtechnical. It has its flaws and it is not perfect, but the world ofcommerce and everyday life could not function without it.

ASK THE EXPERT

Q: What is the near forecast for agent-brokerM&A transactions?
Cunningham: The active climate of thelast couple years should continue for a number of years into thefuture. It is a bit of a “perfect storm,” so to speak, but in agood way, especially if you are a potential seller. There is agrowing inventory of baby boomer sellers needing an exit with anextremely well capitalized buy-side group ready, willing and ableto make acquisitions. The relatively recent and continuing entry ofearly stage private-equity-backed acquirers is a game-changer. Andthat is in addition to the usual long standing activeacquirers.  Consequently, I would not be surprised to seean increase in the number of deals year-over-year for the nextthree to five years, and likely for an additional like periodthereafter.