Sica Fletcher Index Reports 26% Decrease in Total Agency-Broker M&A Revenue for 2024
Total agency-broker revenue experienced a significant decline in 2024, dropping by 26% compared to the previous year. The data compiled by Sica Fletcher Index revealed that the 22 acquirers involved in the index were part of 533 agent-broker deals last year, which is a 6% decrease from 2023. In the fourth quarter alone, these members completed 146 acquisitions, reflecting an 11% decline from the same period in the previous year.
The average revenue of agencies in 2024 was around $3.1 million, showing a notable 21% reduction compared to the figures in 2023. The index attributed this decline to a market recalibration as buyers shifted their focus towards smaller strategic acquisitions while reassessing valuations amidst changing financial landscapes. The analysis also highlighted that sub-$1 million deals were more prevalent in 2024, outnumbering larger deals in terms of volume.
Sica Fletcher’s Agency & Broker Buyer Index, which monitored 65% of all agent-broker activity in 2024, reported a slight drop from its usual capturing rate of 70%. This shift indicates a rise in the engagement of fresh market participants entering the arena. Private equity-backed entities, particularly BroadStreet Partners, led the charge in 2024 with 85 deals, a considerable increase from the previous year. Following closely were Hub International and Inszone Insurance with 62 and 48 deals, respectively.
The dominance of private equity players was evident, with more than 88% of the SF Index transactions being backed by private equity in 2024. On the other hand, public companies like Gallagher made their mark with 45 deals throughout the year.
Despite the challenges faced in 2024, the insurance industry remains resilient and adaptive to changing circumstances. The fluctuations in agency-broker acquisitions and revenue highlight the evolving landscape that industry players need to navigate. As the market continues to witness restructuring and recalibration, it is crucial for businesses to stay agile and responsive to emerging trends and opportunities.
In conclusion, the data from Sica Fletcher Index offers valuable insights into the agency-broker landscape in 2024, shedding light on the shifting dynamics and trends within the insurance industry. The index’s findings underscore the importance of adaptability and strategic decision-making for businesses looking to thrive in a rapidly changing market environment.