Merger and acquisition (M&A) activity in the UK insurance distribution sector reached its highest level of 2024 in November, according to data released by MarshBerry.
With 18 new deals reported, the month marked a notable increase, driven in part by transactions completed ahead of the government’s Autumn budget on October 30. Sellers aiming to lock in the previous Capital Gains Tax rate of 20% before it rose to 24% likely influenced the surge in deals.
Year-to-date (YTD) through November, the total number of transactions stands at 135, just two shy of the 137 deals recorded at the same point in 2023. MarshBerry expects 2024 to end at a similar level to the record-breaking activity of the previous year.
However, analysts suggest the budget may have brought forward some transactions that were already planned, potentially leading to a slower start to 2025.
Several trends emerged from the November activity. MarshBerry noted an increase in acquisitions by overseas buyers entering the UK market for the first time, including deals by Australian group Steadfast and US-based Bishop Street Underwriters.
These firms acquired Lloyd’s broker H.W. Wood and MGA Landmark Underwriting, respectively, as part of their expansion strategies.
The identity of the most active UK acquirers is also shifting. JMG Group, Seventeen Group, and Partners& each completed at least three acquisitions in November, placing them among the top five UK acquirers for 2024. MarshBerry observed that only one of these firms was in the top five during 2023, reflecting changing dynamics in the market.
Smaller transactions accounted for more than half of the deals reported in November. MarshBerry attributed this to a reduction in the availability of mid-sized targets, prompting consolidators to focus on acquiring smaller firms, often with 10 or fewer employees.
While the total number of deals remains high, the average deal size is shrinking, potentially signalling a slower pace of overall industry consolidation.
Private equity (PE) and PE-backed buyers continue to play a dominant role in the sector. MarshBerry reported that 69 of the transactions in 2024—51% of the total—were backed by PE. This represents a slight increase from 2023, driven by activity from newer PE-backed consolidators like Partners&, JMG Group, and Specialist Risk Group.
Personal lines insurance has been a particularly active segment, with 26 deals announced so far, surpassing the previous record of 20 deals in 2021.
The involvement of overseas buyers has declined slightly from the record levels seen in 2023, with 22% of all deals YTD involving cross-border transactions. MarshBerry noted that this is still significantly above the long-term average, reflecting continued international interest in UK targets.
There have been 17 unique overseas buyers of UK insurance firms in 2024, matching the number from 2023.
As the year concludes, MarshBerry plans to release a comprehensive review of 2024’s M&A activity, analysing these and other trends. The review will also explore the implications of smaller deal sizes and the growing focus on European acquisitions by major UK consolidators seeking opportunities in more fragmented markets. Cross-border transactions are expected to remain a key feature of the sector moving forward.
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