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Mergers, Acquisitions Rise 90 Percent Among Benefit Brokers in 2017

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In 2017,  merger and acquisition activity among benefit brokerage firms shot up a dizzying 90 percent in 2017 compared to 2016, according to a report by Chicago-based OPTIS Partners, an investment banking and financial consulting firm that offers M&A consulting primarily to the insurance brokerage industry.

Meanwhile merger and acquisition activity throughout the rest of the business world was relatively quiet. Across the board, deals were down 35 percent throughout 2017, despite several high-profile transactions, including:

 

  • Disney’s historic $52.4 billion agreement with 21st Century Fox, which will afford Mickey Mouse’s parent a sizeable chunk of the media conglomerate’s assets, including a majority control of streaming service Hulu;
  • Amazon’s potentially industry-disrupting, $13.7-billion purchase of Whole Foods;
  • Tech giant Intel’s $15.3-billion acquisition of Israel-based Mobileye, which will afford Intel a huge advantage in the growing self-driving car industry, a market estimated to grow to $70 billion annually by 2030;
  • And in the fashion world, Coach’s (now Tapestry, Inc.) $2.4 billion buyout of rival Kate Spade, as well as luxury brand Michel Kors’ $1.2 billion purchase of footwear maven Jimmy Choo.

 

Within the benefit brokerage market, more than 174 reported transactions occurred  accounting for 28.8 percent of total insurance industry mergers and acquisitions that took place over the course of the year. Privately owned brokerages completed 128 transactions from 105 unique buyers in 2017, up from 114 acquisitions from 87 separate buyers in 2016 – record numbers for both deals and unique buyers. Topping the year’s M&A activity were:

  • Acrisure with 92 acquisitions
  • HUB International, 49 acquisitions
  • Broadstreet Partners, 32 acquisitions
  • Gallagher, 30 acquisitions

If your company provides employee benefit products and services, know that your offerings may be affected by the M&A deals that involve the brokers you regularly work with. Meanwhile, mergers and acquisitions among your current and potential clients, no matter their fields, undoubtedly have them scrambling to consolidate benefits, payroll and other human resources functions – affording you a prime business-boosting opportunity.

Throughout the whirlwind of changes, one thing remains the same – the need for solid, effective benefits, payroll and HR implementation and management solutions. ApexHCM offers a wide range of proven software solutions that will help you provide unmatched service and products to your clients. Call 877 750 2739 or request a demo of any ApexHCM offering online. And download Apex’s new Buyers Guide on evaluating payroll software technology.

 

[Link to Optis Partners’s report – http://optisins.com/wp/2018/01/december-2017-ma-report/]

[Link to Buyer’s Guide –- http://info.apexhcm.com/whitepaperjan18]