At 232, the number of insurance agency mergers and acquisitionsin the first half of 2016 came in just one less than 2015's recordfirst half of 233 deals, accordingto data from Chicago-based OPTIS Partners, an investmentbanking and financial consulting firm specializing in the insuranceindustry.

First-half M&A activity this year also extended the streakof 100 or more transactions to seven consecutive quarters. The lastthree-month period when brokers did not complete at least 100 dealsoccurred in the third quarter of 2014.

“Buyers and sellers continued to feed their hearty appetites fordeals and push up the M&A activity trend line,” said Timothy J.Cunningham, managing director of OPTIS and National UnderwriterP&C editorial advisory board member. “We anticipate therecent strong industry-consolidation trend will continue for thenear term as acquisitions are an important growth strategy for manyfirms, especially those backed by private-equity capital.”

Who's buying, and who's selling?

OPTIS’ data covers U.S. and Canadian agencies selling primarilyproperty & casualty insurance, agencies selling both P&Cand employee benefits, and those selling only employeebenefits.

During the past four years, agency M&A has climbed steadily,with strong buyer interest pushing up prices. The OPTIS reportsegments buyers into five groups: private-equity (PE) backedbrokers, privately held brokers, publicly traded brokers, banks andothers.

PE-backed brokers were the most active group, contributingtoward 114 of the 232 transactions. Privately held brokersfollowed, with 68 deals, which is five percentage points higher(29% in first-half 2016) compared to the same period in 2015.

Publicly traded brokers came in third, with 24 deals, which isdown three deals from 2015's first half, while banks had 15 deals,up three compared to the first half of 2015.

P&C firms have remained the dominant seller group. In thefirst half of 2016, they accounted for 53% of all transactions (124announced transactions), slightly down from 2015's 57%. Benefitsfirms announced 43 deals, while P&C/benefits brokers came in at40.