Economic downturn barely noticeable in insurance brokers’ M&A activity

Although the apocalyptic doomsters are tumbling over each other with gloomy scenarios for the M&A market, the situation in the insurance broking market is more nuanced. This year (2023) will be an unprecedented year in terms of acquisition activity in the insurance brokerage business. Although these developments might suggest otherwise, the second half of 2022 was an active period for acquisitions. For the year as a whole, 2022 was similar to previous years. A good number of transactions took place once again, however, (very) large transactions failed to materialise. Again, we see new (international) parties entering the Dutch market and interest from financial and strategic buyers remains strong.

Market conditions

In 2022, the Dutch 10-year interest rate rose from zero to 2.8%. In the same period, the market risk premium increased by 75 basis points to 5.75%.  Although the effects of this are still of limited visibility in the market, it undeniably affects capital markets and thus impacts the fundability of acquisitions in insurance intermediation.

Outlook 2023 and beyond

After a stable acquisition year in 2022, we expect 2023 to be an unprecedented year in terms of acquisition activity within the insurance intermediary industry. As indicated in the transaction monitor, the capital market for acquisitions has certainly not yet dried up and banks have a positive basic attitude to financing acquisitions (especially by parties with a private equity shareholder).

In the acquisition landscape, as an M&A firm, we also do not notice a decrease in the appetite of buyers. Although some parties emphasize integration (e.g. Heinenoord) and others focus on Belgium in terms of growth (e.g. Alpina), the new entrants and foreign consolidators expanding into the Netherlands ensure undiminished strong demand and thus maintain the high valuations of recent years.

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The Insurance Market Transaction Monitor is an exclusive publication of BHB Dullemond. Our Transaction Monitor provides a complete picture of all takeovers and acquisitions in the second half of 2022 and 2022 as a whole. The figures and trends in the transaction monitor provide more insight and transparency into current and future developments in the insurance market. Please use the form below to download the latest and earlier versions free of charge.