Insurance mergers and acquisitions (M&A) in the US and Canada have slowed significantly, with a notable decline in deal volume, though some sectors show resilience. In Q1 2024, agency M&A transactions in North America dropped by 18% compared to the previous year, recording only 155 deals—the lowest since Q2 2020. This marks five consecutive quarters of decline relative to the long-term average, with activity returning to late-2020 levels. Major buyers like Acrisure and PCF accounted for nearly half of the volume decrease, as some scaled back to integrate operations or rethink strategies. Despite this, firms like BroadStreet Partners (29 deals), Hub International (12), and Inszone Insurance Services (10) remained active. Market discipline is shifting, with buyers focusing on quality firms, keeping valuations high despite economic challenges.
Looking at 2023, global life and health insurance M&A saw 80 deals announced, down from 131 in 2022, but deal values rose from $20.4 billion to $21.5 billion, driven by large transactions in the US. North American M&A remained stable compared to 2022, with a 368% surge in deal value due to four multibillion-dollar deals. In Canada, the financial services sector, including insurance, continues to see significant M&A activity, with 1,068 deals valued at $227 billion between July and November 2024. However, uncertainty around US tariffs and trade policies may delay some transactions in 2025.
For 2025, experts predict a cautious uptick in Canadian M&A, supported by stabilizing interest rates and inflation. Insurtech acquisitions are expected to rise as insurers seek technological edge, with early movers potentially benefiting from late-2024 valuations. Private equity remains active, particularly in property and casualty (P&C) brokerage, though deal closures are taking longer. Climate risks and expiring US tax provisions (e.g., TCJA) could further influence deal timing and structure, especially for cross-border transactions.
Key players like BrokerLink (17 acquisitions in 2024) and Intact Financial Corporation continue to consolidate, with moves like Intact’s acquisition of Jiffy and Groupe AutoSculpt. Meanwhile, major US deals, such as Arthur J. Gallagher’s $13.45 billion bid for AssuredPartners, indicate that high-value transactions persist despite the slowdown. Overall, while M&A activity has hit the brakes, strategic deals and insurtech focus suggest a potential rebound, tempered by economic and policy uncertainties.